Very nice post by SEO Book, I mean Search Engine eBook, ah how about Search Marketing Guide? 🙂 about Latent Semantic Indexing. The idea is related to what I’ve seen described as “contextual relavency” where a search engine (like Google) ranks a document in part based on the related concepts in the page as a whole and compares them to other related documents in the index. What this means for your SEO efforts is explained in more detail in the post, but one take-away is to be sure you mix up your anchor text as well as keyword useage on-page.
Additional resources on this topic are posted at SEO Roundtable.