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Correct me if I'm wrong but this has to be cloaking at its very best.
Visit the site, and then look at the cached pages in Google and you'll find the same thing.
All of the keyword combinations are present in abundance on their homepage.
They achieved their rankings through strong on and off page optimisation with a network of interlinked sites.
Ok, what do you mean by "off page" - as in link backward links, etc.
PageRank
Anchor text in inbound links
Text immediately surrounding the links pointing to the page
Titles of the pages that have links pointing to the page
Keyword relevance of the page linking to the page
Etc.
Ok, maybe if the Googlebot comes along, it shows it the proper site, but all these others?
Others? You mean other engines?
First of all, the keywords that are being targeted are only moderately competitive... and they're not ranking nearly as well in Google as your initial post suggested. For a number of their keyphrases they're not even on page 1 of the listings.
As for the other engines... some consider them a cakewalk compared to the big G.
Sorry I'm not convinced it boils down to an abundance of keywords on the index page...
No, it comes down to that, and the dozens of other variables that are figured into the SE's ranking algorhythms (including the above mentioned cross linked network of a dozen on theme sites which support that abundance of keywords on the index page)
jatar_k had the right idea with this comment:
There's a reason, but can you find it and immitate it?
Instead of crying foul because it's not clear to you how they're trumping you in the SERPs, try to study what's getting them there.
Check out these threads to round out your understanding...
One Size Fits All SEO [webmasterworld.com]
Brett's Quick Rank [webmasterworld.com]
100 variables [webmasterworld.com]
How to succeed in the search engines in just 4 months. [webmasterworld.com]
The latest on keyword density
[webmasterworld.com]
Building a Small-Medium Theme Site
[webmasterworld.com]