As Fathom says, "The original premise for Keyword Density is not just flawed it is complete irrelevant to ORGANIC Search". There are lots of myths about keywords, how to use them, how Google uses them...the list goes on and on. Conjuring the true power of keywords is like summoning a demon from the fifth level of Google and binding its power to yours. But this thread from SEO Chat does some great myth-busting so I'm sharing it around.
Give it a read and share it with friends who are just starting out.