I just wrote a very short article on whether on-site SEO matters as much as the general consensus says it does. Please leave you feedback here: http://thewebstation.wordpress.com/2009/07/27/seo-vs-love/
I've ALWAYS said on-site/on-page SEO matters much less than off-site. IMO there are 3 types of SEO: 1) On-page: <title>, <h1>, <h2>s, content, keyword rich URL, bold, etc. 2) On-site: How other pages on your site link to the URL... and how your site is organized (like using Pyramid Themes) 3) Off-site: How other sites link to your URL. Other than <title> and <h1>, the rest of the on-page SEO optimizations are miniscule in determining how page is going to rank. How other pages on your own site link to your URL and how the site is structured carries a lot of weight in your rankings... But ultimately, it comes down to how other sites link to your URL that determines more than anything how you rank: You can update your URL every 5 minutes and have the most unique content on the planet, but I'm sorry... other than possibly ranking for REALLY long tail phrases that no other page on the web ever even mentions... that page is NOT going to rank well for any type of head term, highly competitve, medium competive, or even low competitive phrase. The only reason search engines like sites that are updated is that they like to have a reason to keep coming back. Don't change pages that already exist to make them want to come back more and more often. Changing a page that already ranks well JUST because you heard Google likes sites that are updated frequently is just plain dumb. Add new pages to your site... Each page you add is considered as your site being updated... you give them new URLs they can put in their index... If each time they crawl your site they find pages that were not there the last time they visited they will likely begin crawling your site even more frequently... And the whole myth about the fact that a "page has unique content" will somehow alone make it rank is just total BS. I can take a copy of any page on the web that ranks, and with enough inbound links from relevant sites with link text containing my targeted keyword phrase, I can out rank the original... Or I can take a page about elephants and make it rank for Wall Street Journal with enough links. But SEO is not about doing one or two things to get a page to rank. It's the 100s of things you do to optimize a page which together make it rank well... Yes on-page SEO counts much less than how your pages on your site interlink or how other sites link to you, but every little bit helps.
hmm, i'm not sure i'm with you when you say you can make a page rank for a completely unrelated term (i.e. wall street journal ranking a site about elephants). why do you think articles make the most effective source of backlinks? because the content is relative. i also do believe that unique content will improve ranking, purely because of the fact that it IS unique. though some may argue that pages with repeated information is more worthy because of the fact it's been repeated. in short i agree that on-page does matter, but probably not as much as everybody makes out.