I am trying to do a good but fast method of keyword research.
If you need to use a city / location in your keyword phrase, then simply find the top phrases people are using in search engines, regardless of # of competitors, and use the phrase plus your city/location.
Especially since I am targeting smallish cities in my area. I would use the top two tools: Overture and Google Suggest.
E.g.: If you are providing web design services: Basically use the roots: web, web site and website and find the most popular phrases that mean what I provide and use the popular phrases on your web page. (2 phrases per page max)
web site design
And use a header and footer on every page like: "'Servicing City1 and
And the location in the "About-Us.shtml" page.