Title tags…

Summary:

Your pages' titles are extremely important. Make them appealing, keyword-dense and avoid copying them from one page to another.

…of course we're actually talking about the title element here, because the title tag only reads <title>. It's the stuff inside that's important…

Keywords
One should only optimise a web page for one or two keywords. The main reason for that is the fact that you should have those keywords in your title element, preferably in front. Remember: this is one of the most effective methods of on-page SEO.

Limit the length
As mentioned above, it is no use to stuff your title with numerous keywords, for it is virtually impossible to back that up with other on-page techniques. More than three keywords per page will seriously hurt your keywords density. Instead, make new pages – optimised for the other keywords – and give them an appropriate title. It is far better to keep your titles short, in order to preserve a high in-title keywords density and also to prevent various search engines from cropping them (i.e. replacing the last bit with "…"). Some search engines even shorten titles over as little as 45 characters.

Click appeal
Apart from keyword density, your titles should offer something useful and appealing to your potential visitors. Since your titles are the most prominent features of your pages on the SERPS, they should lure people into clicking on them. Spammy titles won't achieve that, sexy titles will. You could even incorporate special characters like "::", "♥" or "◊", to make them stand out. Include your company name if you're trying to build a name for yourself, but place emphasis on the keywords that people would actually search for.

Similar titles = similar pages?
To avoid having your pages drop off the SERPS, or – at best – be listed as "omitted results", don't use the same title on more than one web page. The same goes for meta tags and other "informative" bits of HTML code, by the way. Your site's title elements should really all be similar (to help recognition) but unique at the same time.