No it's the worst predictor of finishing freshman year. The claim is that SAT + high school GPA is stronger then GPA alone which is a pretty weak claim.
As for what it actually measures (as opposed to what it trys to measure), opinions differ...
http://en.wikipedia.org/wiki/SAT#Correlations_with_IQ
"Frey and Detterman (2003) analyzed the correlation of SAT scores with intelligence test scores.[20] They found SAT scores to be highly correlated with general mental ability, or g (r=.82 in their sample). The correlation between SAT scores and scores on the Raven's Advanced Progressive Matrices was .483 (.72 corrected for restricted range). They concluded that the SAT is primarily a test of g. Beaujean and colleagues (2006) have reached similar conclusions.[21]"
"Certain high IQ societies, like Mensa, the Prometheus Society and the Triple Nine Society, use scores from certain years as one of their admission tests. For instance, the Triple Nine Society accepts scores of 1450 on tests taken before April 1995, and scores of at least 1520 on tests taken between April 1995 and February 2005."