Song leaders can have a huge impact on the worship services. If we take the time to pick songs that go together well, that build to a theme, the edification of the worship service can be raised to a higher level than random songs picked at the last minute. Furthermore, if the song leader thinks about the message of each song and the musical aspect of each song, there are often ways that the song leader can help emphasize the song's message, e.g., slow down for this passage or speed up for that passage, sing louder or softer, etc. It doesn't take any type of formal musical training to do this, rather it just takes the consideration of the song's message. (Musical training does help one understand the possibilities better.)
While those things are all good, and are ways that the person leading the worship of God in song can help to accentuate that worship and the edification that singing is supposed to bring, there are pitfalls that the leader should be careful to avoid. I've found myself thinking so much about singing well myself, about keeping up the pace, about how I wanted to lead each song so as to accentuate its message, that I don't actually worship. I'm doing everything except thinking of the words and praising God. We leaders need to be careful not to forget ourselves as we lead others to worship.
The bigger problem, however, stems from the fact that I sometimes want to show off. I stop leading others in worship and start performing. "Look at how well I can lead this song!" "I can sing more musically difficult songs than other leaders can." "Isn't my vocal range impressive?" When my efforts become more about drawing attention to myself rather than drawing attention to God and heightening the edification of the songs, then I am no different from those Pharisees who sounded the trumpet before they gave alms (Matt. 6). There is hardly anything in the Gospels that Jesus condemns more vehemently. Of course, it isn't just song leaders who can fall into this: some preachers orate just to hear the praises and some pray intricate prayers just to impress. But I think song leaders are especially susceptible because the things that we can do to impact the worship are performance-type things and we tend to be performers who like applause.
We need to be careful to make sure we are serving and worshiping God, not performing for the lauds of men.
For I say, through the grace that was given me, to every man that is among you, not to think of himself more highly than he ought to think; but to think as to think soberly, according as God hath dealt to each man a measure of faith. Romans 12:3