Here is how I go about finding new keywords to target. I mainly use Goto's search term suggestion tool to actually find new keywords, but there's more to it than that. I spend a lot of time using that tool and here is why.
I find that with extensive brainstorming, you can find phrases and terms that don't have a lot of competition but are still targeted. I try to put myself in the searcher's shoes.
For instance, with the phrase "home business". This is a very competitive term so it's unlikely I will get a top 10 position because I'm not a pro (yet!). So, in thinking like someone who is searching for a home business, what do I think some other phrases would be?
For one thing, you can type in "home business" and see what other terms show up underneath it. You will find more phrases that are searched on but they all contain the words "home" and "business". So while they are additional phrases there is still a good bit of competition.
If you don't belong to the market who searches for your target terms or phrases, look at some ads in magazines, on TV, or in e-zines where people in your market hang out. Pay attention and you will find some more search terms and phrases.
Going back to the home business example. If you check in to some opportunity seeker's magazines or publications you will see ads for things like medical billing or stuffing envelopes.
This is when you go back to the search term suggestion tool and search for things like "medical billing" or "stuffing envelopes". See how many people are searching for these terms. If it's more than 200 in the Goto tool, I'd say it's worth targeting for the bigger engines.
I would also test what kind of competition you have in the big engines by typing in the search phrase and seeing how many documents are found.
This has been a way that I've discovered quite a few new keywords to target that aren't too competitive but are searched on quite a bit. Find a bunch of them and you could end up with a heavily trafficed site without obsessing over a top 10 for an extremely competitive term/phrase.