Reading through forums and blogs it's clear some people are still very confused about writing optimised web pages. Will Google like this, will Google like that, will Google destroy my computer if I do this wrong...........people people, chill out, Google isn't the bogeyman!
First off your page TITLE ELEMENT, sometimes called your title tag. As you may have read elsewhere this is an important aspect of your web page. It's not important because Google says so, it's important because a web page title element exists to provide a concise description of a web page! It therefore makes sense to make sure your title element describes your page, and if you are describing something in a concise way it stands to reason you would use key words! Think of your title elements as mini elevator pitches for each page's content.
For the record Google generally displays the first 66 characters of your title tag (although I'm seeing slightly more now) in the Search Engine Results Page or SERP. Yahoo on the other hand will display 120 characters. If you make your title tag more then 66 chars long it's not a problem but I'd never exceed 120 characters. As a rule of thumb make them read naturally.
Now your page's META DESCRIPTION ELEMENT sometimes called meta description tag. This is a bit like a slightly longer version of the title tag. Meta data means information about information. It's effectively a concise description of the content of your web page. That's why Google uses them in the SERPs under the link to your site. Google will display 160 characters. If you are creating a concise (160 character) précis of your page it would again follow that you would use key words. This isn't so we can praise and worship at the temple of Google, it's because this is what a meta description is for.
Now just a quick word about the META KEYWORDS ELEMENT. These have been so widely abused that all but a few search engines ignore them - apparently. However, in order to create a well formed web document it's a good idea to use them, it can't hurt. One word of warning, don't put every keyword you can think of into the keywords meta tag, only use keywords that appear in the content of the page.
And finally the on page tagging. Imagine your native language is English and imagine (for me very easy) that you can't speak any other language to any degree of proficiency. If I handed you a magazine in a language you didn't understand and asked you to look at an article you would I'm sure be able to show me the parts of the article that were important. You would be able to recognise the headings - they would be the words that appeared bigger and bolder. You may not understand them but you could copy them onto a note pad and with a degree of confidence suggest these words described the content of the article.
So when you write a web page make sure you give it headings using words that describe the content below it. When you do this use the HTML H tag so the search engine spiders will know where the headings are as they have no other way of knowing.
Once again, this isn't done to please the mighty Google, it's done because it makes sense to give articles titles and sub headings.
I'm a fan of Google but I don't worship it and spend my waking hours worrying about what it might or might not like. I concentrate my efforts creating great well formed web pages. Don't pander to what you think Google likes and doesn't like, simply create great web pages using page elements for the purpose they were designed for and you won't go far wrong.