I'm using Google Keyword Tool to find terms for a small investing site that is going under redesign. Is a keyword still "low competition" if the top ranking positions are held by major sites like wikipedia and yahoo?
The easy answer is that it depends. For some keywords Wikipedia is a safe "default" choice, since the content is almost always reasonably good, and searchers seem happy with Wikipedia in Google results. In these instances, Wikipedia and similar sites are quite easy to beat.
In other areas, Wikipedia has very strong articles with large numbers of links into them, and can be very stiff competition.
In terms of assessing organic competition levels, you should look at both on-page factors (allintitle: is a good starting point) and off-page - is Wikipedia's page ranking purely because it has internal links to it? If so, then it would usually be supplanted easily by a page with good external references and links.
I suggest that you actually want to see one of the larger players (wikipedia, yahoo, etc) at the top of the page.
This most likely indicates that the niche your keyword addresses is not saturated with truly targeted & deep content, but rather, the most relevant result Google can find are domains with large authority.
It should be easy to displace them with a little work.