Keyword in the domain would help provided the keyword is also located elsewhere on the pages that it is serving.
If it is just keyword.com, and then rarely appears it will be assumed to be of no real relevance to the keyword search.
A combination of on-page SEO works best in msn search but regarding google it is completely different in what they consider keywords.
Msn appears to give more weight to on-page seo than both yahoo and google. My estimations are about 60/40 for msn for on-page SEO / off-page SEO by msn, 50/50 for Yahoo on-page/off-page seo and 40/60 for google on-page/off-page seo.
However, in saying that with google redoing how they handle off page linking it maybe they give a higher value now to relevant off-page SEO and pay little to no attention to the actual page contents - that is what I am seeing in search results pages, less and less relevance to the keyword search by google to on-page content and more towards junk that is not related.
Msn, by applying relevancy of pages via on-page SEO to keyword search is starting to prove a lot more effective in bringing up relevant pages that are actually useful for my searches. I am not sure if they have changed recently or not on how they handle things as I have just recently got into this and obviously it is only my short-term experience so far, patterns may change in the long term.