Ultimately whether I saw a resume was dependent on some sort of subjective pattern matching done by the recruiter. This pattern matching is usually primitive and generally is just a check on whether your "years of experience" is within striking distance of whatever was in the job listing (e.g. "Senior Software Engineer" that required 5+ years of experience, the recruiter would filter anyone with less than 3 years), and (sometimes) would check whether your resume contained enough buzzwords. Yes, this is awful, and no, not every organization does it this way, although a lot do.
So while listing side projects on your resume is good, it's important to get it past the recruiter screen by translating those side projects into years of experience. Rather than just a single line in your resume like, "Side Projects: Enguarde.ly, a Link-Sharing Site for Fencers," find some way to list Enguarde.ly as experience. For example, list the time you worked on your side projects as experience as a "Web Consultant," put Enguarde.ly as a 'portfolio project' and describe the technology you used to build it.
Once your resume actually gets to a hiring manager, everything the OP talked about is much more relevant, because you'll actually have someone who can evaluate your resume. Although I think this post overstates how much your undergrad degree matters. I am a graduate of the University of Pennsylvania, typically considered a very prestigious school, but the engineering school is ranked 27th according to US News and World Report rankings[0]. I know many hiring managers who would much rather interview someone with an interesting set of portfolio side projects than someone who went to a prestigious school. Your alma matter can sometimes provide a small bonus as a small signaling effect, but I consider software engineering a discipline where a formal education is only loosely correlated with skill.
[0] http://talk.collegeconfidential.com/engineering-majors/12136...