Pay Per Click ads are all the rage, but if you neglect the PageRank of your webpages in an "organic" or "natural" search, you may be wasting thousands of dollars.
It is possible to achieve decent rankings yourself, if you have the proper tools -- excepting, of course, extremely competitive keywords such as "home mortgage" and "life insurance." Here are the tools I use and recommend:
SubmitWolf from Trellian is a tool I use to submit a website -- or a new section of a website -- to dozens of directories that seem appropriate. Thus it provides a great source for one-way links to a site. The tool is updated regularly and selects which directories to submit your site based on the topic you have selected. I've had good results with rankings soon after submitting several mini-sites. Strongly recommended.
WebPosition from WebTrends is what I used to consider the "Swiss Army Knife" of SEO tools. One of its chief uses is to run ranking reports to see how your site is ranking for the keywords you're trying to be found for. You can select which search engines to study. It now includes the Google API, which makes Google happier than before with WebPosition. The other main use is the Page Critic function to tweak individual pages on your site so they will rank higher. Page Critic analyzes your webpage and compares with the top pages on the Internet for that keyword as well as with WebPosition's current intelligence on exactly what you should do in each section of a webpage to rank higher. What it doesn't do a good job on is managing linking strategies. Highly recommended!
WordTracker is another essential tool to help you do keyword research. For about $8 per day you can do all the research you'll need. There's even a free version if you want to try it out. You put in a keyword to WordTracker. It will come up with a series of synonyms as well as keyphrases -- and tell you how popular searches are with each keyphrase. (The free version is built in to WebPosition 3, to make it easier for you.)
OptiLink is a specialty tool I use to help me understand linking patterns to my site. It's a bit difficult to explain, so read my review. If you're serious about building a strong base of either reciprocal or one-way links to your site, this is the powerful tracking tool you'll want to use.