^ So are you saying, build some strong pyramids + high PR contextual homepage links as your backbone and then you can blast away at your money site with scrapebox and xrumer?
High PR text links are extremely powerful. Linking from the homepage is a huge shout out.. As is a blog roll/page roll. In my experience, these links can hold you in place, even a younger site, while you blast the homepage. Of course you need more than just that, I set up a campaign where all product photos were Flickr (tons of them!) and all products had a YouTube video (again, hundreds of videos).. New products went up in sets of 5-15 once per week, Scrapebox scraped forums and XRumer blasted the homepage. It danced for a bit, we placed some high PR homepage/page roll links and it bounced right back to spot #4 and stayed. Later on, removed the links and continued the campaign.
It has remained page 1, usually #4-6 for most related terms. #1-2 for the primary keywords. (edit: for over 2 years now.. none of the Panda updates have bothered it and actually, a competing website that we knew was placing paid links and Scrapeboxing was outranking us.. Unrelated; that's how I got into SEO and ended up here [Join Date: Nov 2009]

Anyways, that competing site actually dropped a few months back and the site I was working on climbed into the #1 & #2 spots.)
Alright so what I have gathered from reading this entire thread is the following:
On-page SEO is not nearly as important as off-page.
I had reached this conclusion on my own after purchasing a 20k scrapebox blast on Fiverr (I'm sure mostly/nearly all PR1 links) and seeing the results for myself: nearly an instant jump in Google ranking.
It is sad that Google Panda is hitting the wrong folks
It depends. On site SEO is important in one big aspect.. How much off site SEO work do you want to do; or is required? If you're in a competitive field, you're not going to fare well with horrible or no on site work done. It's possible, of course, but it's going to take much, much more than it would with good on site.
This means that if you get up there, your competitors (who we'll assume have good on site SEO since we've switched to a competitive field) can respond to your Scrapebox campaign with minimal effort and regain their positioning.
However, if you've got good on site done, you can climb and *keep* your position easier. Plus, there's no reason not to. Good on site takes 12 minutes with WordPress and I'll tell you 90% of what I do:
1.) A plugin called "WP no category base." When you enable permalinks, this strips out the mandatory category base, which IMO shits all over WordPress' built in URL structure and makes it retarded. Seriously, WordPress has excellent built in SEO, but the URL structure is flawed big time as far as that goes.
2.) Set up your site map with "Google Sitemap Generator." Once you've got your URLs squared away, create your categories according to your keywords (in this case, site.com/
diets/
acai-
berry.. "acai berry diet") Now, whenever you create a post/page, the sitemap generator will update your sitemap and ping the major search engines like a dinner bell.
Then of course you want to use permalinks (%category%/%post% is best, IMO) and a SEO plugin... I forget the title of it, somebody will know the name if you're really interested, but it's the one that scores your pages/posts 0-100% for on site... (headings, density, placement, formatting, images, alts, titles, etc)
But like I said, it's all down to first, what you've got time for and second, how much is *required* in your niche to climb and *stay.* If it's competitive and you need on site to stay successful, then what I just told you along with a few other things (meta, page titles, navigation structure, stuff like that) will do everything for you and THEN you can carry on your back linking campaign.
Sorry for the novel.....