Skins is exaggerated, of course, but the basics are right. More so than crap like The OC.
The second series has been totally OTT, but that, I suspect, was the writers' attempt not to be branded 'formulaic' in their plot structure. But, as someone else posted above, the first series was brilliant.
Skins does leave out a lot of the boring dreary stuff. But I have been to insane parties like the ones they show, albeit not every weekend, and I know people like the characters, I know people who've had their problems. It just seems unbelievable because everything is so condensed.