1. I was working at an ISP help desk and a local computer repair company called in desperately needing help with a *nix box. Went out on my own after a shift and helped the tech out. He emailed me the next day and asked if I was interested in working for them as a repair tech and if so when would be a good time to do a short interview. I eventually moved up to the director of web dev at this job. (Side note: Getting the ISP job was because of a direct referral)
2. I applied for a web dev job at the local newspaper about 4 years later. They offered me the positon about five weeks after applying - two weeks after my second interview. They were notoriously slow for interviewing and hiring people.
3. (current gig) Two years after that I applied for a web dev gig at the state university and was offered the position about 4 hours after my first and only interview. The interview went really well and all my referrals were awesome.
Now between all those jobs (about a 6 year span) I've probably applied for at least 5 other web development jobs and didn't even get interviews for all of them. For some I'm sure the lack of a college degree really made them think twice. In one interview I got burned on some technical questions that I couldn't answer which probably removed me from the pool.
While knowing people can be extremely helpful, I've found being ready when opportunity knocks much more useful. To put it another way, don't stop learning new things.
By continuing to expand your knowledge you prove that you're smart enough to learn and use new things, and that you care enough about your work to make yourself better at it.