tedster - 6:36 pm on Feb 10, 2011 (gmt 0)
In my view, keyword density is essentially a tool that webmasters can use as a guide. With a metric like that you can be sure that your text hasn't gone over the top or accidentally gone out the bottom.
But I'm convinced that an actual density metric is not a part of the algorithm used at any major search engine. Pages can rank quite well at almost any level of keyword density, and you've got to serve your audience first and foremost. Otherwise any level traffic doesn't do you much real good.
The content writer's challenge today is that many semantic measures are in place - far beyond ordinary word stemming or synonym use. For example, co-occurring phrases are important today, where in the past they were something to keep minimal.
Here are a couple of discussions form the Google SEO forum that can get your ideas flowing:
Phrase Based Indexing and Retrieval" - part of the Google picture [webmasterworld.com]
Phrase Based Multiple Indexing and Keyword Co-Occurrence [webmasterworld.com]