I've come across several interpretations of the role of "project manager" in the industry - it seems to vary a great deal from shop to shop, and sometimes even from project to project. The range covers the completely hands - off: "sit in the back room and play quake all day" to the completely hands - on: "necromancy the developers with daily reports from them and double - check all their decisions". Needless to say, somewhere between these extremes lies the ideal.
There are some things project managers *must* have - recent development experience: they should have been through two or three projects as a developer, otherwise they can't really understand the process they have to manage, and the results are hopeless. They must also play the current crop of games so that they have a good idea of the playability and visual quality required of the project so that they can identify what is lacking. Anyone who doesn't meet these requirements is bad news.
The worst case scenario is a 43 old bowling alley manager who knows nothing about games leading the team because he looks "safer" at shareholder meetings. Ok, this never happened to me, but I have seen enough similar things in the past to lead me to believe that particular horror story
Of course, never having managed a project myself, I would not presume to offer a critique of others who have managed me, but I can point to an excellent source of advice for such people.