It's more likely to actually work than just about anything else besides good sex. Sexual excitement and especially orgasm releases a hormone called oxytocin (also called "the love hormone" into the bloodstream. It's the same thing that gives you butterflies in your stomach when you have a big crush on someone. The synthetic version of oxytocin is something you've probably heard of - pitocin. Which is used to artificially induce labor. So yeah, playing with your nipples can help. But, as with anything else, it'll only work if your body is really ready for true labor to start.
Im sure it does because when u breastfeed after giving birth u feel contractions.