Hey I use a combination of 8 plugins. I wrote a post about them in detail. Check it out here http://forums.digitalpoint.com/showthread.php?t=2222407 I use Wordpress SEO by Yoast W3 Total Cache WP Smush.it SEO Friendly Images Smart 404 YARPP (Yet Another Related Posts Plugin) WP-Paginate SEO Smart Links Share and Follow Set these plugins up correctly and you have a near perfect Wordpress SEO set up
Try the outbound link manager: http://www.searchmatters.com.au/wp-plugins/outbound-link-manager.php It lets you change anchors, nofollow, etc.
I used to Use All in One SEO Pack - But then one friend of mine suggested to use YOAST WOrdpress SEO. That is really GREATE PLUGIN & ONE OF THE BEST SEO Plugin for Wordpress. It has all the things you need for ON PAGE SEO Including URL, Category URL, Snippets View, etc blah Blah !!!
Th best Wordpress plugin is one you can't have yet - it tells you whether or not your post will pass google. Which is actually all that really matters. When it's available commercially, I'll let you know.
All in One SEO is best and do apply one technique when configuring, Change Post Title Format: %post_title% , and Page Title: %page_title% for batter SEO results.
Yoasts SEO for wordpress. He is a totally cool dude and his plugins are really solid. other then that: permalink change and write optimized content.