Adwords interace and Adwords editor make it very easy to see and edit which keywords you appear on page one for. It's more tempting than ever to add a little more money to each kw to make sure you appear on page one. My question is, do you get into bidding wars with your competitors, or set a max bid and leave it?
I generally like the #2-3 positions. #1 seems to get a lot of curiosity type low convering clicks.
On the other hand most of my keywords had no ads competing, so no bidding war involved except against Googles make believe QS minimum bids. (long tail niche product phrases). Always starting at QS10 and dropping about once a week, bids increasing until there is no ROI and I end up pausing the KWs.
In one example I found 24 typos on a 2 word phrase with good converting traffic, It took Google about 2 weeks to price them out because their QS never heard of dsylexic & transposition typos, plus normal spelling or usage differences(eg USA "center" vs. Canadian "centre").