To what extent and in what ways do folks deem key word density to be of any importance - I have been told by several authoritative figures in the industry that this component is now of negligible importance or impact - thoughts?
To me, keyword density is a bit of an odd measurement. As a quick rule of thumb for a page, it's useful. But that doesn't mean it's a direct ranking factor - IMO it would be strange for a modern search engine to factor it in directly. After all - the main aim is to identify the most relevant documents. Not the ones that mention something the right amount of times.
Not to be intentionally vague, but I think the most relevant document is likely to have a fairly high "keyword density" compared to other documents, but that doesn't mean the measurement itself is particularly important.
And in the days of Google rewriting queries to oblivion, what does keyword density mean, anyway? [webmasterworld] is [webmaster world] is [web master world]. There are few tools out there that even account for basic word variations, less still acronyms, synonyms or commonly co-occurring words.