That's true - though I think it'd be safe to say that "every first draft is terrible" is something you could say about the vast majority of writers... for sure there are mozarts in the world of writing - but I'd be very surprised if there were many.
Most of my short stories tend to be first drafts, not counting minor edits like changing individual words or making occasional refinements to sentence structure. But then my short stories really are pretty short, so I don't know to what degree this will generalize to novels yet.
As for my non-fiction books, the process has usually been such that the concept of a first draft isn't really valid. I don't write them straight through and then refine, instead I'll write parts of one chapter and then another in non-linear order, then revise some of what I've alrea...
Followup to: Don't Fear Failure
In the same theme as the last article, I think that failure is actually pretty important in learning. Rationality needs data, and trying is a good source of it.
When you're trying to do something new, you probably won't be able to do it right the first time. Even if you obsess over it. Jeff Atwood is a programmer who says Quantity Always Trumps Quality
The people who tried more did better, even though they failed more too. Of course you shouldn't try to fail, but you shouldn't let the fear of it stop you from tyring.
I wouldn't go as far as to say that quantity always trumps quality, but where the cost of failure is low lots of failures that you pay attention to is a pretty good way of learning. You should hold off on proposing solutions, but you also need to get around to actually trying the proposed solution.
I'm normed such that I'll spend more time talking about if something will work than trying it out to see if it works. The problem is that if you don't know about something already, your thoughts about what will work aren't going to be particularly accurate. Trying something will very conclusively demonstrate if something works or not.
Note:
I originally had this as part of Don't Fear Failure, but that post got too long.