My personal experience with using keyword density on my main site Empty Streets 1027 is that the more I use the my chosen keywords which is Empty Streets several times in my posts and the layout including the side bars and meta tags and descriptions has helped my site move up in rankings and is what helped my site reach the top link for the keywords -Empty-Streets-1027. though admittedly my new pagerank of 4 has a lot of weight too but prior to the new page rank Empty Streets has already started it's climb due to the overuse of the words Empty Streets :)
Aside from that you can also use the Website Grader site above to check on your competitors performance in terms of keyword density against your own site. The general rule is if your competitor has a greater density than yours you have to work on surpassing your competitors numbers in terms of density - even more so if the competitor site has a higher page rank than yours.
So far that is what I have been using but as always I like hearing and learning from others and so I found this useful video that is quite as informative and very helpful in further explaining this SEO marketing principle.
With that video and my own experience with Keyword density I do hope this gets to shed some light to your questions about the use of keywords on your websites and how this can help you get recognized overall. Till the next time. xoxo
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