Well as to the question of whether graffiti is vandalism or art, I say it's both. Art is generally defined as "the quality, production, expression, or realm, according to aesthetic principles, of what is beautiful, appealing, or of more than ordinary significance", and since "beauty is in the eye of the beholder", therein lies the arbitrary line between its status as vandalism or art. It's art when it's aesthetically pleasing and desirable, and it's vandalism when it's not so visually pleasing, lacks any meanings/messages whatsoever, and is generally unwanted. That being said, any given piece can be interpreted as vandalism or art according to the viewer's tastes and/or preferences. It's completely subjective. While many of us will probably say that tagging is a nuisance and not art, I'm sure there will be people who will think otherwise. Context is very important too, a Banksy piece in some snooty place like Beverly Hills will probably never be considered as "art" (assuming, for the sake of argument, that nobody in that area knows who he is and couldn't care less). But in a young/hip place such as Melrose Avenue in Los Angeles, it'll definitely be a welcome contribution, and will likely be perceived as art by the people who frequent that area.

Personally, I think that if you're a graffiti writer but don't have the skills/creativity/good ideas, then you don't deserve to use public spaces as your canvas if you're trying to pass off as an artist. A big part of graffiti is its audience; if nobody's ever going to see what you write, then you probably won't write it unless you're plain bored and/or drunk. Public space is a public forum, so if you want to make use of it to express something, you'd better have something good to present. Otherwise, you're just wasting peoples' time and being a public nuisance, and you'll be regarded as a vandal and not an artist. It's like street busking - one could ask if it's art or noise pollution, and the distinction will lie in how good the busker is, and also if he/she is at the right place and the right time to hit his/her target audience. So IMO, street art contributes to a wisely chosen strata of society if it's good (art), and it's a nuisance if it's totally pointless and aesthetically unpleasant (vandalism).

Interesting interpretation, but your definition of 'good' (art) & 'aesthetically unpleasant' is somewhat flawed.. it would leave an awfully large gap in art history. Most of interest generally challenges the 'status quo', throughout the ages new forms of expression have caused outrage and horror, the shock of the new.

Individual tags can be challenging, but taken collectively as a whole, it's quite an amazing movement and one that led directly to graffiti. The sketch to a painting perhaps. I guess there are different types of 'tagging', kids with pens writing on anything and everything without any cultural reference points to graf, and those others who see it as a precursor and legitimate type of graffiti.

Both equally important and intersting from a socio-cultural perspective. But it's not art, much closer to a form of urban caligraphy. Art is what artists do, for want of a better word.