It depends on what kind of "space blanket" you're talking about.

If it's the thin mylar ones that compress down to about the size of a pack of cigarettes, then yes, my personal opinion is that their value for insulating the victim from rain/wind/drafts is good, BUT, their value for warming a victim is practically nil because they depend on whatever warmth the victim can generate to bounce or reflect it back to him.

If you're talking about the more robust "sportsman's blanket," which has a stiffer backing (usually some kind of rip-stop material) and takes up a lot more space, then yes, these provide both a barrier and some true insulative qualities because of the nature of the material.

Either one is better than nothing, and the space blanket’s small size is what merits its inclusion in many PSKs, but it would be foolish to depend on that alone to save your life in a blizzard or other extreme situation.