My favorite tools for SEO are the free tools, but I also love Micro Niche Finder.
I have a number of sites, all built using the green light indicator to find profitable keywords to build a site on.
When it comes to on-page SEO, beginning at the keyword level is going to be key, so I'd recommend MNF or:
SEO for Firefox (Free plugin for Firefox browser)
SEO Quake (if you don't use Firefox, either works)
The SEO Toolbar from SEOBook.com is fantastic (includes the SEO for Firefox plugin as a download) -- competitive analysis tools are on there, as well as a free rank-checker to see where your sites land for their respective keywords and in Google/Yahoo!/Bing...
There is an SEO Xray function in which you can look at a page to find out if the links are dofollow or nofollow, and you can get a list of the keywords that page is trying to rank for (including the meta data).
So, if you build a website and want to know keyword density on your page, you can self-analyze using this tool suite. OR you can use it to do competitve analysis.
That would be key before buying a domain: check the first page for your keywords, see how the top 5 are ranking (and you can check their backlinks with a Yahoo! Site Explorer integration), for what terms, and then check their PR, domain age...I wouldn't be caught dead without either the SEOBook toolbar (free) or SEOQuake.
Having said that, to simplify the keyword process, I always use Micro Niche Finder, as I find the free tools to give results that miss a ton of opportunities.