First post here, and have to say I'm glad I've found this forum.
I've been using Market Samurai for my keyword research and use it to identrify keyword with good search volume and little competition.
Of course this is easier said than done, as judging competition effectively is more of an art than a science.
As a newbie I'm only starting to appreciate a the importance of comptition analysis, but in a nutshell I currently try to analyse the backlinks of my potential competitors and then try to evaluate if I have thje skills and resources to outrank them. If I think I can then I will go for that keyword, if I don't then I move on to the next one.