I am currently applying and am a former Peace Corps volunteer. First of all, congrats on considering such a great challenge as Peace Corps! I wish you all the best - it was a life-changing experience for me, but it definitely is NOT for everyone. I do feel that my Peace Corps experience has helped increased my chances of admission. The kind of real-life experience you get in PC is something not easily found in other post-college activities, and I have had the impression at my interviews that my experiences in PC have helped to highlight me and my application.
That being said, I want to echo what previous people have said about the intensity of the program. It can be a long, frustrating 2 years (+3 months!) of your life, and I seriously counsel you to think about why you want to do this. If it is merely "resume padding," or even if that's a part of it you might want to reconsider. You will be stymied in your efforts, you will have many failures, and you will often question what you are doing in some backwater corner of the world and what you are actually accomplishing.
Peace Corps carries a lot of name recognition, but there are many opportunities for intense volunteering experiences that may not be such a commitment. However, the commitment alone is one of the things that always impresses people when I mention I was in PC. I think medical schools like peace corps volunteers for this commitment, the inevitable challenges of living and working in the developing world, and the personal growth the experience often brings about in the volunteer.
I don't think, however, that the "Peace Corps merit badge" will make up for a lackluster GPA/MCAT. My stats are at the average/above-average level for most top twenty schools, so I can't say whether or not the Peace Corps experience alone has made much difference. Nonetheless, its just about the only thing my interviewers want to talk about.
I guess the take home message is, yes, Peace Corps will probably help you out in applications, and it certainly can't hurt you. If nothing else, it gives you an interesting and unique perspective from which to approach your application and interviews. But please please please don't just do this because you want to get a "free ticket to harvard," cause it isn't going to work like that and you will be wasting 2 years of your life if PC isn't something you're passionate about.