Recently, Google changed the way it ranks pages. It's not a huge change, Google says it will only affect about 12% of websites and so far it only applies to sites in the U.S. The change is meant to cut down on 'content farms', sites that look like they have a lot of content, but can be little more than keyworded search engine bait and not always that helpful to someone searching for real information. Google frowns on these sites that are more about advertising than content.
A few weeks before the Google change, giant retailer JC Penny got a slap-down from the search engine when it was discovered the store was using links from other sites to distort its popularity.
Trying to tip the Google rating scales to a sites favour is nothing new. There was a time when sites were stuffed with hidden keywords (a no-no). Cleverly stacking meta tags is not so clever any more, and the door has been slammed on doorway sites.
These search engine 'tactics' are kind of like fad diets -- they seem to work for a while, but usually back-fire in the long run. If your site is found to be using one of these methods, you can get blacklisted by Google -- and nobody wants that!
Play Nice - Give Them What They Want
The key to grooming your site for search engines is to remember what search engines do -- provide useful information to people looking for it.
Google is very clear about what they're looking for, they spell it out in their guides, including how to handle changes to Google search engines. Basically they want sites that have good content about a subject. The site should have links to other sites, so the user can find out more on the topic. They figure if other sites link back to yours, you must know what you're talking about. Updating the content regularly tells them the information is current. You also get get bonus points for having a site with no coding errors, and supplying the search engine with a site map. That's it.
Yes, it's fair game to use keywords in your site, but it has to be plausable. For example, if you're selling bicycles and you know 'bike' is more popular than 'bicycle' then use 'bike' more when referring to your product. (Ex. 'We carry a large range of bikes.' vs 'We carry a large range of bicycles'.)
But don't be silly (Ex. 'We have lots of bikes, red bikes, little bikes, big bikes, yellow bikes. Come and see our bikes!').
It really comes down to being authentic. If your site is about promoting your product to people, then talk to people, not the search engines. Be who you say you are, share what you know and over time, your site will do well.