Advanced Trading has a couple of interesting articles regarding the demand for quants, and the related trends on Wall Street.
Demand for Quants
How Traders Achieve Alpha
I-Banks and Trading Floors

A couple of interesting quotes from these articles:
From John Comerford, EVP and global head of trading research at Instinet,

Level 2 data is about 30 gigabytes a day. We’re dealing with data that’s closer to what they deal with in the biosciences and the genomes and not what people deal with in standard relational database technology.

From Paul Alapat, managing director and head of quantitative services at Amba Research, speaking on the two types of work quants perform

Alpha-generation strategies that involve a lot of testing and validation work until they are comfortable that a certain strategy will produce returns over a certain benchmark. [The second area is managing, measuring and monitoring risk].

From Arlene Rockefeller, head of global equities at State Street Global Advisors,

If you are doing something everyone knows how to do, such as matching an index, you can’t charge extra for it. Further, it’s more difficult to maintain competitive advantage because of the fluidity of information — constant innovation is required, Rockefeller adds. “When everyone was excited about quantitative investing, everyone copied everyone else,” she says. “Now those strategies have the potential of being reclassified as beta.”

From Will Cazalet, director of long-short equity at AXA Rosenberg,

We look at what the market as a whole pays for each component — fixed assets, pension liabilities, goodwill, cash — then there is the earnings forecast model out over a number of years. We are not comparable to a lot of quant firms that use factors such as earnings-to-price, momentum, relative strength, dividend yield and historical factors. We don’t do that — we are really more fundamental.

A couple of interesting points - the article Demand for Quants discussed how banks and funds are looking for people with skills in at least two of trading, mathematics, and technology. Business acumen is also particularly useful as many coming from a pure math background, or backgrounds in other studies such as engineering and physics, lack that baseline knowledge.

This is pretty consistent with what I see, even though I am relatively disconnected from the physical street. Minimal experience is key as well. Two years, even if not particularly glamorous ones, open a lot of doors. Some employers are hungry enough that they are looking at side-work a candidate may have done. An acquaintance of mine recently was asked to show a “model” he created in his spare time when applying for a job unrelated to his current role. I have had similar experiences.

There is also a lot of talk about the demand for MBAs. This is something that the Wall Street Journal covers in-depth. Now that I am finished, we will see how the landscape looks.