The first step is to cut out the crud.

Then, divide the rest into three groups:

Best - Should rank well in all three factors:
1. Popularity of keyword (demand)
2. Number of competing sites (supply)
3. Value (are other webmasters spending money for the search term?)

Take your best 10-30 or so. You will want to hammer away at these, almost every page you have should contain these keywords in some combination.

These are the keywords to feature in page titles, internal and external linkage, domain names, URLs/File names, etc.

Good
These should be solid on the three categories above, but nothing that really jumps out at you.

A good niche should have 50-200 of these keywords. Sprinkle these in liberally with the BEST keywords.

OK
These keywords should have decent #1 and/or #3 from above. Some would call these the "longtail" keywords.

A decent niche may result in 100-1000 of these. Use these more lightly but try to get at least an instance of two of each somewhere on your pages BUT NOT AT THE EXPENSE OF BEST AND GOOD KEYWORDS.

Next, we need to "weigh" these keywords. I don't know what keyword "index" you are using, so I can't be specific, but in general follow these guidelines:

If one keyword has a "rating" of 100, and another keyword is rated 10, that makes the first 10x more powerful. ( 100/10 = 10 )

Therefore in theory, you will want to use the better keyword 10x more than the second keyword.

The same strategy should hold true...If one keyword has 1,000 searches and another has a rating of 50, use the first one 20x more often, as 1000/50 = 20.

Again, this is theoretical, as weighing keywords like this exactly proportional across all your pages isn't "conventient".

However, if you see one keyword is rated as 1000 and another as 50, you know you should use that keyword a lot more than the other keyword.

Thanks for your insight into how to 'pare-down', a big list of keywords, into something more manageable and targetable, and your strategy for deploying the results for best effect, according to their 'strength',

You don't make mention of what software you use to do this.

May I put forward my preference for dealing with all nature of text files? It is Text-Pad, http://www.textpad.com/ and I think it was you who 'switched me on' to this, in the first place. Thanks again.

It is an incredible tool, with a versatility only limited by your imagination. ( Very similar to a lot of the Tuelz, IMHO.) It is especially good at dealing with RegEx's,(Regular Expressions, including EOL's and punctuation.) a feature that is especially useful, when doing 'search and replace', operations, prior to, (and subsequent from) inserting into the various Tuelz.

Tuelz and Text-Pad make a formiddable combination.

It is certainly one 'non-Tuelz' tool that I would have no hesitation in recommending.

Kind regards

Ian