The housing boom has changed the relationship of renovations to value. In most markets, the cost of renovations (within reason) is less than or equal to the value added to the property. As appraisers, we develop comfort levels of contributory values  that renovations may add to the overall value of a property we are looking at. Well, the relationship of renovations will likely change (and may already have) as the market leaves the boom.
There are no long term rules of thumb in valuation since the cost versus value relationship is always changing.
In the article Is it worth it? [Cape Cod Times]  the writer explores what renovations add most to value. The orientation in this article is towards older homes, which are more predominant in the Northeast than in other parts of the country.
Some updates add to value, others may reduce marketing time and yet others may diminish from value. The rising costs of labor building materials have made this issue more important than ever to property owners.
One of the basic criteria I always consider is whether the update is neutral in terms of taste and design in order to appeal to the widest segment of the market. The more personalized the update, the less it adds to the contributory value of the property.