We ran into the same discussion last week at out company. After research here is what we decided to do.
We decided to stick with keyword frequency(repetition) – 2-3x for short pages and 4-6x for long pages.(exact match for targeted keyword)
Here are a few pointers from a leading SEO community:
(Not sure if is is against this forum's rules to mention the exact name hence I am dropping those details)
# Number of Keyword Repetitions - It's impossible to pinpoint the exact, optimal number of times to employ a keyword term/phrase on the page, but this simple rule has served us well for a long time - "2-3X on short pages, 4-6X on longer ones and never more than makes sense in the context of the copy." The added benefit of another instance of a term is so miniscule that it seems unwise to ever be aggressive with this metric.
# Keyword Density - A complete myth as an algorithmic component, keyword density nonetheless pervades even very sharp SEO minds. While it's true that more usage of a keyword term/phrase can potentially improve targeting/ranking, there's no doubt that keyword density has never been the formula by which this relevance was measured.
# Not surprisingly, a persistent myth in SEO revolves around the concept that keyword density – a mathematical formula that divides the number of words on a page by the number of instances of a given keyword – is used by the search engines for relevancy & ranking calculations and should therefore be a focus of SEO efforts. Despite being proven untrue time and again, this farce has legs, and indeed, many SEO tools feed on the concept that keyword density is an important metric. It’s not. Ignore it and use keywords intelligently and with usability in mind. The value from an extra 10 instances of your keyword on the page is far less than earning one good editorial link from a source that doesn’t think you’re a search spammer.