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First off, it depends on the popularity of that keyword--the more popular the higher the page rank and backlinks of the competitors. If it's a lesser used word then often a low PR site will be ranking higher.
Also, I have a client who is ranking on 1st page for his major keywords after only 3 months of his site being redesigned but all his traffic is coming via long phrases in the articles he wrote that don't have those words in them--so again, content is king.
Real answer: Links. How you manage your links business matters too. More and more all the time. Any doubts about what to do, just read Brett's 26 steps...and pay attention to what's happening in the (underattended) links forum. :o
Keyword density needs to be significantly less than a while back. Our sites which repeat keyword several times have plummetted in Google rankings while sites where it may be only mentioned once or twice among hundreds of words are ranked higher.