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It is the single most important element on the page for seo purposes. The difference between being in the top 10 and just being in the top 10-100 are titles.
We used to talk in terms of titles being worth 10-15 out of the mythical perfect 100 point page. I've come to think of them more in the 20-25 range today (ya, a good title is 25% of the page for seo purposes. it is the make it or break it element).
Oh I agree, but what really baffles me when I look for associated competitive terms for our industry, ones that have strong rankings don't have any backlinks when checking the backlink command at Yahoo. It doesn't make sense whatsoever. Sure some do extremely well with black hat techniques, but others without the two word phrase in the title tag doesn't make sense.
One example that shows a steady #2 in Goo has six letters in the title tag-kinda like "widg.ca" That's it! Furthermore, the phase doesn't even come up on the page consecutively?