Susan Mernit has a great post up about saying no in product development cycles (it was also Susan's birthday recently -- happy birthday!).
It's a great post. It's applicable not only to large businesses/sites (Susan works on Yahoo! Personals) but really to projects of any size. Many web projects, the "launch" of a site is just the beginning. *Maybe* the functionality and content are done, on simpler sites, but now it's time to start marketing and promoting the site. In most other cases, there a bunch of items that fall into a staged launch schedule (say "no" for launch and plan it for a later rollout) or in a big "future features" bucket (say "no" to it at first, and dump it in the future features bucket) which can be revisited over time. And of course, feedback from the users of any website should be taken into account when looking at these lists.
I also want to draw attention to the first of Susan's criteria: "Make the product support both the customer experience/value and the business needs". Every feature has to balance both interests. Often times, this is not correctly balanced, and too much in either direction is going to cause issues.
In general, I'm too nice. I like to say "yes" a lot. I've been working on this, and actually REALLY enjoying saying "no", or challenging people to prove/explain/defend what they want and how it relates to the goals of a project. A good "no" can be worth 10 yes's.
As an aside or addendum, I wanted to talk about connecting with people in person and then continuing to read their blog. I met Susan at Gnomedex: she spoke on stage and we briefly shared a cab with Kate and I. One of the first things Susan said was "I read your blog". Wow. First, that's a bit scary, and makes you want to step up your writing game. Secondly...meeting someone in person is just a different experience. Now, when I read Susan's blog, I can "hear" a bit more of her voice and personality behind every phrase.
Meeting people in person adds to the richness of their data in your own personal info cloud.
Meeting someone whose blog you read puts a cloud of data around their head of past/shared data context.