I get a lot of PMs by new members and even old ones asking for suggestion on keywords they have selected. They say that "Google says the competition is low" by looking at the competition bar (pic below) in the Google Keyword Tool.
Well guys..I've got some bad news for you. This is NOT the SEO competition, it is actually competition for advertisers, the amount of bidding going on for that particular keyword. So if you are making an Adsense site, you want the competition to be "High" in the Google Keyword Tool.
More Competition=More Bidders=Better Payout
There are other ways of analyzing competition for a keyword which are explained HERE and HERE by IamNRE. So I won't repeat that, but don't judge the competition of a keyword by the bar shown above.
It's called the Adwords keyword tool - not the SEO keyword tool.