However you do keyword optimization, it won't bring you much traffic for a free site. That coming from a non-SEO-expert.
I've been experimenting with various approaches, and found one that works for me: use small number of keywords (3-4) in one phrase, everywhere on your site. That includes <title>, <h1>, <img>, <meta> tags and actual text on the page. Go for 3-4 keyword phrase, and be sure to target lower traffic keyword phrases because competition for them is lower. Don't overdo it, one repetition in all tags and 1-2 times in body text. As for img tags, I'm not sure - I put the same alt text on all images (eg alt="cute-teen-stripping-01.jpg", "cute-teen-stripping-02.jpg", etc).
When you submit your site, you'll get a link from LLs with keyword phrase in anchor text and the link will come from similar themed page, which I believe is good for SE rankings.
10 SE hits a month times 200 free sites is 2000 SE hits a month. It could make a difference for your bottom line. I didn't count SE images search hits in that. I get a lot of those but it doesn't do much good.
/This thread could go to "Search Engines"