lorax - 12:57 am on Nov 12, 2012 (gmt 0)
Okay - I did a bit of research (after exchanging stickies with burcot) and here are some additional thoughts.
First, the page of your competition that ranks well isn't a product page - it's a category level page which backs up my theory that multiple products with similar copy won't rank as well as one page with excellent copy and options.
I see the trouble you're having with how to display all of the products/options. Here's a thought though:
Write copy for the first of the category level pages. Write about the different options and explain how they're different, what they do and what a buyer might want to consider before they buy. Make this page buyer centric - answer all of the questions they'll have about the products and the options. This is not the place to discuss shipping or warranties though you can mention them (and link to the appropriate page). Use this page as you KW target page. Make it extremely user friendly.
Provide a few of your top selling products on this page but make sure they're distinctly different in appearance so the buyer will instantly see the difference. Location of these should be above the fold somehow (sidebar?) Make sure these include links to the respective product pages. Think about including a Buy Now option for each one of these - no more than 4 or 6 on this page.
Then provide a link to Page 2 of the product listings (no copy on these pages - just products). Continue with pagination as you normally would. Be sure they all have an link back to that first category level page for the main keyword(s)
Focus your efforts on that category level page.