Ranking high at Google - key number one
While there are numerous things measured by the Google algorithm, one thing seems to outweigh every other aspect. I'm talking about listings in the Open Directory Project. Google seems to heavily favor sites and pages that are listed in there. At the very least, you will have to be able to get your root/index page into the ODP. Attempt to include your most important keywords in the title and in the description you submit to the ODP. Having these words in the name of the category you're submitting to or in the URL you submit are also things that might have a positive effect, but I am unsure whether they produce a significant benefit or not.
After you have been able to squeeze your index page into the directory, try to do the same to as many of your subpages as you can. ODP's rules state that in most cases, they will only list one page per site, but I've seen plenty of sites that have at least five subpages listed. Be careful while doing this, because excessive submitting can in extreme cases result in all of your pages being dropped from ODP and your site banned for life.
The minimum requirement is to make sure that each page has plenty of useful, unique content that is relevant to the category you are submitting to. It might also pay off to keep a brief "cooling off" period in between submissions. Never, ever even attempt to get all of the pages on your 200-page site into ODP.
Again, include your most important keywords both in the title and the description you submit to the ODP. For example, if you sell cars in your online store called "Auto Shop", have a subpage about Ferrari Testarossa and you want it to rank highly for those words, the title and description you submit to ODP should be something like:
Title: "Auto Shop's Ferrari Testarossa page"
Description: "Read about the history of Ferrari Testarossa, learn about its driving characteristics, visit a gallery of pictures or buy the thing!"
Got it? For each page, select one unique keyphrase, get it into the title and the description and submit. Choose the keyphrase carefully, because once you've submitted, it can be difficult to change the information you have entered. Repeat this process as many times as you dare, selecting content-rich pages from your site and submitting them into different categories.
This is a case of greed versus fear - if you're too frightened to try, you'll never get anything. But if you let your greed push your brains into the background.. you'll lose everything you already had. Should you want to get further details on submitting your website to the ODP, simply read my article about the subject.
Ranking high at Google - key number two
At this point, you hopefully have at least one, but preferably a couple listings at ODP with perfect descriptions and titles. The next part is to optimize the HTML code of the pages to match Google's algorithm as well as you can. While I believe that the ODP listings are the most important factor in the ranking, a completely unoptimized page that is listed in ODP can certainly be beat by a well-optimized page that is not in it. Of course, the best combination is a page that is both optimized and listed in the directory, what is exactly you should shoot for.
OK, let's take a look at the various areas of page optimization for Google:
Title: The keyword or phrase should be included in the title of the page. However, it is probably best to include other words in addition to the keyword as well. For single keywords or two word phrases, I'd consider a title of 3-5 words in length to be the best choice.
Headings: Placing the keyphrase in a H1 or H2 heading at the very beginning of the page seems to work well. I have seen pages that rank high without headings, but it would seem to me that a good heading makes the job a bit easier. For the heading, I generally use just the keyword or keyphrase without adding any other words into it. If the page in question is a very long one, using a H3 heading with the keyword in it every now and then to retain the focus doesn't seem to hurt.
Density: Google doesn't seem to be too picky about keyword density, just as long as the keyphrase is found often on the page. In many cases, Google seems to tolerate and even like very high keyword densities.
The page should be somewhat "front-heavy", meaning that you should work the first instance of the keyword somewhere very near to the beginning of the page and make it appear once or twice fairly close to this first keyword, scattering the rest across the page.
Special words: Including the keyword in link text or in bold text does seem to give a slight advantage, but is not mandatory in my opinion. If I would have to choose between the two, I'd see using the keyword in link text as more important than using it in bold.
Meta tags: Not useful with Google, but you won't get into trouble for using the standard keyword and description tags either. Include them or leave them out, your choice.
Link popularity: As said, ODP links are gold, but links from other respected sources, especially Yahoo, can be very valuable as well. Links from normal pages, if you have a large number of them pointing at the page you're optimizing, will provide a good edge against the competition.
Click popularity: Not in use.
There you have it, the outlines of the Google algorithm as seen by me. Not very complicated, is it? I hope that the information you've read has been detailed enough to give you some ideas on how to improve your ranking and get more traffic to your site.