Since the first pillar of SEO is having content on your site that matches the keywords people type into the search engines, you need to first find out what keywords relate to your site. Thankfully there are a lot of ways to facilitate the process of uncovering the most relevant keywords for your site.

Don't try to strike gold on your first effort by looking for the most popular "search term". Your goal at the initial stage of understanding your "keywords" is to build the most comprehensive list of ALL "search phrases" relevant to your site.

The "Keyword Pyramid" Methodology

Did you notice how I just used 3 different ways to describe the same thing: "keywords", "search terms" and "search phrases". The reason I did this is to show you that people on search engines also use different routes of searching to get to the same end goal.

The goal of the keyword pyramid is to amass a list of ALL the types of searches people MIGHT use to locate your type of site. Once you have the list, then you start prioritizing the search terms and grouping them into categories. The 2 main categories are "least/most relevant to your site" and "least/most competitive". At the top of your pyramid is the search term that is most relevant and most competitive and thus the most profitable if you get ranked in a top position. At the bottom level of your pyramid are search terms that are least competitive and least relevant.

Once you have arranged your pyramid, your method of attack in terms of the actual optimization process is to use a TWO PRONGED APPROACH.

On your web pages and with web site directory listings you actually target the search term from the top of your pyramid ("Primary Keyword") and you just mix up the content on your pages so that you are not always focusing JUST on the primary search term but close derivatives of it.

Through blogging and article marketing you use a bottom up process whereby you intentionally target a search phrase on the lower levels of your pyramid that is the most relevant to your site while being the least competitive ("Blogging Keyword"). As these lower level terms start getting ranked, you move up a level in the pyramid and build more content on more competitive terms until finally you get to the top of your pyramid and start getting all your keywords ranked.

For a great tutorial on keyword research, visit:
http://www.seotimetable.com/index.php?section=articles_zoom&TAG=Keyword_Research_Guide