Exactamundo. Karagounis had many great qualities as a player, but his best was that he didn't give away the ball cheaply. He could hold onto it, he could shield it, he would get the foul if required. Either way, the opposition didn't get the ball easily. I remember hearing a statistic on Karagounis (never confirmed it) that he was the most fouled player in the CL one particular season. This is back when PAO had a killer team before he left for Inter.
The important thing is, that if as a player you have confidence in your team mate, you will make different decisions. Pretend for a moment you are playing and you have the ball. Karagounis makes himself available. What do you do ? You pass it! Because you know he will more often than not not lose possession. Done. Easy.
Now let's say you're in the same situation and it's a different player. You think "man, sometimes he does some really silly things with the ball" and you're unsure of whether to pass it or not. You delay 1/10th of a second thinking about this. Oh what! You've been tackled and lost possession, or you didn't make the pass and instead went for a more difficult pass, and lost possession that way.
Either way, if a player compensates for a team mate (as I suppose they should) it affects the flow of the game.