An interesting article I came across was Aaron’s blog post, “How to Estimate the Length & Value of the Long Tail for Your Target Market’s Keywords“. It was an interesting read about How do you determine how much value there is in the head of a keyword space compared to the tail of the same marketplace?
A good observation Aaron made was to examine Search Auto-Completion to see additional popular phrases that may be easier to rank for. I see this as an essential part alongside using competitive research tools.
I think all Aaron’s points are great, and I firmly believe after working on numerous high profile – high traffic sites, that if you find yourself ranking #7 for a page that does not target a specific term, perhaps you WILL rank #1 or #2 for it and for related phrases if you make pages that are focused on a tighter niche and are more tailored to longtail queries.