Obviously, if you ask any player who they would rather play with between an undergeared player who knows how to play and a well geared moron, they will choose the skill over the gear. Unfortunately this line can be blurred along the way. Unless you have previously run with the person, you will not really know what you are getting until you run with them.
The undergeared person could be that way because they are terrible and cause PuG groups to fall apart with their bad. They could also just be fresh level 80 characters for a player who may already have 2-3 other 80s.
The geared person could be a very good player. They could also be terribad and carried by their "family" guild as they have been there since the beginning.
Obviously a well geared moron is going to outperform an undergeared but skilled player on the DPS meters if the "skilled" player is wearing level 62 outland blues. Of course, if this is the case, how skilled (or smart) can that player be. There are other ways to measure a player's worth besides the damage meters. Do they know when to use aggro reducing cooldowns? Do they know how to properly use their CC? Do they not die in the fire? These things will make a player skilled despite any gear deficiencies they may have. Pretty purple pixels are absolutely worthless if the person wearing them is dead or just flat out bad.
The other day I got into a 25 man Emalon PuG. There was another Ret Paladin in there wearing full epics including a few pieces of 7.5 and the Jawbone for his weapon. By comparison, my Pally had a few crafted epics, one Naxx 10 epic, the Mirror of Truth, and an assortment of blue and green items left over from leveling. I ended up doing about 2500 dps to the other paladin's 1750 DPS. One of the big differences? He was using Seal of Command which is really not any good outside of questing. Smarts will out-do gear any day. Kinda like the old brains over brawn argument.
If you have a choice, choose wisely. Dead (dumb) DPS does zero DPS. Remember, always PuG responsibly :)