Keyword density is one of those tricky SEO numbers that you have to master or risk failing your SEO strategy. Use too few of your keywords and your strategy won't work, or use too much and you will get penalized by Google for keyword stuffing.
PromotionWorld.com has this article on keyword density: the perfect number, SEO analysis, and the like. Check it out for your reference.
Link: PromotionWorld : How To Keep Keywords In Check For SEO Copywriting