I know search engines crawls through web sites and index pages based on their content and keywords. That's about it, SEO isĀ huge business these days so I'm reaading into it at the moment. The first book I got is Brad Callen's "Search Engine Optimization Made Easy". I' m going to discuss this book and the main points in it along with other resources on the net.
A good (free) keyword research and management tool to use is Good Keywords.
PageRank
PageRank is Google's way of giving a popularity rating for a website. It is based on "votes", a vote is a link from one website to yours. The more votes you have, the higher page ranking your website will have. PageRanking is one of the factors Google looks at when ranking websites.
Another factor is the sites that link to your website. A website with a high PageRank linking to yours increases your website PageRank more than a low PageRanked website would. The quantity of pages that link to your website also affects your PageRank.
To find your sites Google Page Rank, download the Google Toolbar.
The page rank for my site (http://www.michaeldoyle.eu) is 0/10, which doesn't come as a surprise, however, it will provide me with a blank canvas to use SEO techniques. When seearching Google for the term "Michael Doyle", a wikipaedia entry is the first result. It's PageRank is 4/10. Callen's guide idicates this is low page rank and it'll be easy to gain a higher ranking. However, the only way to increasethe PageRank is to get other sites to cast your site a vote.

Google Toolbar showing PageRank
There are two search engine optimization methods: on page and off page optimization.
On page Optimization
Title
The page's title is the most important piece of text as this is what appears in the search results. It has to encourage users to click on your site. The title should be descriptive using the least amount of words as possible. Words like "and", "the" etc. should not be used. Keywords must be used.
Headers
H1 should be used to define the most important section of your website. It should be placed at the top of the page as Google reads text from top left to bottom right. Using your primary keywords is recommended if possible.
H2 & H3 should be used to define the sub-headings. Secondary keywords should be used where possible.
Text Styles - Bold, Italicise
Use on keywords in a paragraph, however, do not over do it. Google may penalise you for it.
Images
Give your image files appropriate names (not 01.jpg), try to use keywords in the image file names. Use keywords with ALT text, but add in "image" or "graphic" as well. If not, Google may see it as spam. This applies to the filename also. Always include the title tag in the image (this is the tool tip text that appears).
Forcing Google to read your content first
If you have a two-column layout using the leftmost for navigation, Google will read this first. However, placing in an empty div at the top of this column should force Google to read the right content (the main body) first.
Summary
On page optimization won't have a huge affect on your PageRank, however, a well formed page will be more easily accessible to search engines as well as your visitors. Many falsely believe that tweaking their Keyword Density and where those keywords are placed will have a big effect on your rankings. Keyword Density refers to the amount of time a keywords appear on a page, compared to the total number of words on the page. Off page optimization makes a huge difference to the sucess of your site compared to on page.