1. Select and use strong keywords. Keywords are, indeed, important. I'd even go so far as to say it's THE most important facet of SEO. However, keyword density (too few or too many) is a myth. The search engines don't reward or punish based on how many times you use a certain keyword, and you will never be excluded altogether for using a word too much. Write for humans first, and the algorithms will generally decipher intent. The place to concentrate on your keywords is in the anchor text of links to a page (both external and internal) and in page Titles.
2. Compare to other sites. By all means, explore your competition . . . but you will learn next to nothing by doing a View Source. The algorithms try very hard to look at what the visitor sees to determine relevancy, not at what the programmers see. Meta-tags are mostly ignored and hidden text is either ignored or penalized.
3. Use keyword tools. Again, this is good advice to follow, but vastly over-simplified. For example, you generally do NOT want to target popular search terms until you are already ranking well for less popular search terms. Popular search terms are highly competitive, usually far too much so for a site still in the toddler stage of development. Popular search terms are usually also too generic to convert well. You need to find the keywords that you can realistically compete for and that will bright the RIGHT traffic. Doing that is as much art as science.
4. Have working links. Your visitors would very much like you to have working links. The search engines could care less. Dead links will NOT negatively affect your rankings (at least not directly; irritating your visitors, however, will indirectly affect a lot of things).
5. Submit your site to directories. Today's search engines consider links into your site as citations, votes that essentially say someone liked what you did. So, yea, you want to get links, and directories are a good place to start. Here's the thing, though: The easier it is to get a link, the less that link is probably going to count as a valid vote to the search engines. If a directory gives you a link just 'cause you asked, it doesn't mean they liked what you did. Such a link won't hurt you, but it won't help much either. If a directory charges for links (as opposed to charging for a review, like yahoo.com or business.com does), the engines have probably already de-valued those links and won't count them at all. The search engines are dead-set against paid links.
6. Create a sitemap.. Submitting an XML sitemap to the search engines will NOT guarantee that all your pages will be included. All a sitemap does is help the spider find the pages, it doesn't force the spider to crawl them. Generally, a spider crawls pages based on perceived importance (as determined by links, both internal and external). If your navigation is good enough for a visitor to follow, it is generally good enough for a spider to follow -- and a sitemap will be completely unnecessary.
7. Create backlinks. Right. Links to your site are the single most important thing that contribute to good search engine placement. Getting good links, however, isn't all that easy. Again, if a link is easy to get (if anyone can write and publish an article), it's not going to count for much.
8. Use reciprocal links. Need I even say it? If a link is easy to get, it's probably not worth getting. This is especially true of reciprocal links, which Google has been de-valuing for well over a year now. They won't hurt you (bad neighborhoods excepted), but reciprocal links are a complete waste of time. Spend that ten minutes creating some good content instead.
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