freejung - 11:06 pm on Jul 15, 2010 (gmt 0)
Another way of putting this is that I think on-page SEO these days is sort of like "you must be at least this tall to ride."
You should make sure it's clear to search engines what terms you are targeting. That means KW in title, body, alt, anchor, yada yada. You should make sure your site is on-theme and content-rich, has no technical problems, and has sensible navigational structure.
If you don't do those things, you're not likely to rank in most cases. If you do those things, you might rank.. Where you rank will then be mostly determined by off-site factors (PR, Trust, Authority etc).
As tedster said, there may be some terms where on-site factors will matter - those are probably long-tail, low-competition terms where just being relevant at all is good enough to rank.