Does this mean your extreme musical tastes get watered down? To some degree, yes. Unless there is a secret sub-population of people who love Sammy Davis Jr., Carcass, Boyz 2 Men, William Shatner, and Dolly Parton, you're probally out of luck; this is a Similarity Engine not a matchmaking service.
This is not to say that you shouldn't list divergent artists; cross genre cultivation is actually one of the more interesting things this database may be able to pick out. But pick 2 or 3 from each genre and you'll probally obtain better matches. The same goes for new artists, if you list 2 new artists with three previously entered artists, then you'll establish a better set than if only one of the artists is previously known.
Another thing that can happen is that a few popular bands happen to wash out the lesser known bands; if you find this happening, simply click on the name of one of the lesser known bands that appears in the results list and you'll see the names linked to that one.
The more similar bands you enter, the better the database becomes.