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their site is ok, in SE's for some keyterms.
they have also bought 3 other domains...i.e. goodkeyword.com betterkeyword.com and 3rdbestkeyword.com
should i have them use betterkeyword.com as their primary site, and have the other re-direct?
You should be a good enough SEO by reading webmasterworld to get the website ranking for all three terms without any big problems.
I wouldn't change a companies domain name for the sake of a keyword you should really just get them ranking for each keyword.
How do you think YouTube would have got on if they'd have changed their URL to watchvideosfreeonline.com
or LonelyPlanet.com to traveldestinationsinformation.com
All depends on the goals, if it's short term SEO gain then maybe, but even then probably not.
The extra ranking help that might seem to be there from a keyword in the domain name is not as big a factor as it might seem at first, at least not from what I can see. Today's algorithm is not so simplistic, and tomorrow's algorithm will be even less so.
If I were you I would be advising them to start a secondary website using the preferred domain name. If and when the traffic from this site starts to pay off you could then consider what to do in the long term but in the short term your client would not suffer.