Targetting the wrong keywords
This is a mistake many people make and what is worse – even experienced SEO experts make it. People choose keywords that in their mind are descriptive of their website but the average users just may not search them. For instance, if you have a relationship site, you might discover that “relationship guide” does not work for you, even though it has the “relationship” keyword, while “dating advice” works like a charm. Choosing the right keywords can make or break your SEO campaign. Even if you are very resourceful, you can't think on your own of all the great keywords but a good keyword suggestion tool, for instance, the Website Keyword Suggestion tool will help you find keywords that are good for your site.
Ignoring the Title tag
Leaving the title tag empty is also very common. This is one of the most important places to have a keyword, because not only does it help you in optimization but the text in your title tag shows in the search results as your page title.
A Flash website without a html alternative
Flash might be attractive but not to search engines and users. If you really insist that your site is Flash-based and you want search engines to love it, provide an html version. Search engines don't like Flash sites for a reason – a spider can't read Flash content and therefore can't index it.
Concentrating too much on meta tags
A lot of people seem to think SEO is about getting your meta keywords and description correct! In fact, meta tags are becoming (if not already) a thing of the past. You can create your meta keywords and descriptions but don't except to rank well only because of this.
Using only Images for Headings
Many people think that an image looks better than text for headings and menus. Yes, an image can make your site look more distinctive but in terms of SEO images for headings and menus are a big mistake because h2, h2, etc. tags and menu links are important SEO items.
Many people underestimate how important a good URL is. Dynamic page names are still very frequent and no keywords in the URL is more a rule than an exception. Yes, it is possible to rank high even without keywords in the URL but all being equal, if you have keywords in the URL (the domain itself, or file names, which are part of the URL), this gives you additional advantage over your competitors. Keywords in URLs are more important for MSN and Yahoo! but even with Google their relative weight is high, so there is no excuse for having keywordless URLs.
It is a common delusion that it more backlinks are ALWAYS better and because of this web masters resort to link farms, forum/newgroup spam etc., which ultimately could lead to getting their site banned. In fact, what you need are quality backlinks.
Lack of keywords in the content
Once you focus on your keywords, modify your content and put the keywords wherever it makes sense. It is even better to make them bold or highlight them.