Everything that I have heard about the mathematics graduate admissions process has been that Letters of Reference are the most important part of an application. Good grades are neither necessary nor sufficient to get into graduate school, or even win a Fields Medal and Wolf Prize.
Wikipedia wrote: [Smale's] sophomore and junior years were marred with mediocre grades, mostly Bs, Cs and even an F in nuclear physics. However, with some luck, Smale was accepted as a graduate student at the University of Michigan's mathematics department. Yet again, Smale performed poorly his first years, earning a C average as a graduate student.
That being said, things are different now-a-days. The MGRE is a standardized test, so it allows the admissions committee to more equally compare applicants on a mostly arbitrary measure of mathematical competence. I speculate that if the school you went to is the gold standard for mathematical research, then your grades might substitute. Otherwise, if the school you went to is not very well known, then nailing the MGRE seems to be important.
In Fall 2011, I applied to 10 schools (top 20 programs as per the USN ranking) and after getting rejected from all of them, I am applying once again. I have now posted my profile in the 2012 thread. My GPA is about the same as enork's and last year I got a 710/65% on the MGRE. In talking with my research advisor about why I wasn't admitted to the school where he worked, he told me that if either my grades were higher or I had a better MGRE score, then I would have been accepted. Hopefully I will have good luck in 2012.