Putting SEO keywords in the page title (a) doesn’t actually help your page’s rank in search engine indexes, and (b) makes things harder for people trying to tweet a link, bookmark your page, or scan it from a list of currently open windows and tabs in their browser. Trust the Googlebot to figure it out.
I'm pretty sure point (a) is false [1], and I'm absolutely sure that the conclusion (trust the Googlebot!) is. You should probably optimize for humans first, but not humans only. That's just not the way the web works.
EDIT: I realize the SEOMoz data is based on SEO experts ranking what they believe is most influential, but what else are you going to go on? Maybe patio11 or someone else on here who is an SEO whiz can offer some of their experience.
I hate saying "trust me", but since I'm mentioned by name: he is as wrong as it is possible to be wrong about SEO. It's so wrong, its like me suggesting that all the cool iOS developers add their bezels with Photoshop, which is why you can't use Flash on an iPhone.
In my experience, Titles do matter. Titles matter not only as a main "ranking factor", but also because the Title is most often the link from the search engine result to the webpage.
Having keywords in there means that those keywords will be highlighted/bolded in the result, making them stand out -- I don't know if that actually makes people click on links more often, but I wouldn't bet against it.
Also, using Apple as an example from the article, Apple's Title is Apple because people don't get to the Apple site by searching for "mp3 player". People go to Apple's site because they want an Apple product. Apple doesn't need to try and rank for all that other stuff; it's not what they do and they don't need it. Branding is different than ranking.
It is odd that Atwood calls these people "scrapers" when I'm pretty sure they are just using the dump file that you can download and then doing better SEO than SO (in the past, seems like SO now ranks ahead of them in most cases).
I'm pretty sure point (a) is false [1], and I'm absolutely sure that the conclusion (trust the Googlebot!) is. You should probably optimize for humans first, but not humans only. That's just not the way the web works.
http://www.seomoz.org/article/search-ranking-factors
EDIT: I realize the SEOMoz data is based on SEO experts ranking what they believe is most influential, but what else are you going to go on? Maybe patio11 or someone else on here who is an SEO whiz can offer some of their experience.