The exact algorithms that search engines use are closely-guarded proprietary secrets. However, it is rumored that these guidelines are used: The recommended number of characters for the Title Tag is between 60 and 80 and the Description Tag should be limited to 150 characters. The maximum number of Keywords we recommend is 25, with the maximum number of characters 874. The site may be disqualified if keywords are repeated more than 5 times.
However more recently, I've heard talk that Google doesn't even use the "keywords" meta tag in their web search ranking anymore. I did some research and found that verified on a posting dated September 21, 2009 on the Official Google Webmaster Central Blog.
Organic Search Engine Optimization refers to elements that can increase your rankings without automatic submittal and page alteration or paying for placement.
Meta Data
Meta Keywords are the words that your customers may type into their search engines to find your business. Limit your meta keywords to 8-10 keywords.You should also take the time to create a meta description which includes your keywords of focus for each individual page. Make sure this description contains at least one use of the keyword phrase you are focusing on. The meta description is usually one sentence that concisely describes your content.
Body Text
When writing the copy for your pages, be sure to include your keywords. Optimally, each page of content should contain between 250 and 600 words and include your keyword phrase at least 4-5 times. However, if you feel that adding it that many times will lessen the quality of your visitor experience, DON'T do it! Your first objective is to create an excellent user experience and provide value to your visitor.
Page Title
Your page title is one of the first things the search engine spiders view. This title tells the search engines what your page is about. You should NOT simply repeat the keywords over and over in this title. You should limit this title to 8-10 words and it should make sense to the visitor.
URL
The URL that displays in the address bar of your browser should also contain the keyword focus of the page. The best way to include the keywords is to separate them with hyphens (-). If you don't the search engine spiders will view all the words as one big word.
Headings and Sub Headings
Headings and sub headings are another good way to incorporate your keywords into your content. This allows Search Engines to accurately index the content of your pages, along with allowing the reader to easily scan pages to find what they need.
Text Based Navigation
Because Search Engines cannot read images or flash, it is best to use text based navigation that mirrors the keywords you are focusing on for the page. Be specific.
Image Alt Text
If you include the keywords you are focusing on as alternative text for your images, you'll be letting the spiders know what relevance the image has and it will be yet one more instance of proper keyword usage.
Build Links
Search engines look at inbound links to your site. If those links are coming from relevant sites which have a high page rank, they will help increase in your position.