Search Engine Optimization for Magento

Magento in and of itself is prime for SEO but there are a number of simple tweaks that you can do to improve the SEO for your magento installation.

1. Magento Canonicals
1. Canonicals are important so you don't have duplicate versions of your website and to keep the crawlers on target when scanning your site. My suggestion of how to handle this is to:
1. In Magento 1.4 you will need to go into config and set no to "redirect to base url if..."
2. Include this in your .htaccess
1. RewriteEngine on
   RewriteCond %{HTTP_HOST} ^yoursite\.com
   RewriteRule ^(.*)$ http://www.yoursite.com/$1 [R=301,L]
2. Enable Server URL Rewrites
1. The reason this is important is it lets you take advantage of Magento's url rewriting engine to make your urls use keywords and help seo. To do this:
1. go to system/config/web/seo and enable url rewrites
2. then set "add store code" to no
3. Customize your Header
1. Search crawlers will use information from your header to determine what content is on the page, and what keywords to target for it. You will want to...
1. go to system/config/design/html head
2. pick a good title for pages on your site without custom titles, remember the first couple words are key
3. you may want to include a good description and just a couple target keywords - I suggest leaving title prefix empty or you will be stuck with those words for every page on your site, limiting your ability to optimize per page
4. you will want to remember meta descriptions is what shows up under title on search results - this is where you want to explain what the page says and pull in your audience - much better to do this on a per page basis
4. Customize your Categories
1. You will want to get into your category settings after you create a category and make sure you add a static header for each one, giving a full description of the category, perhaps with imagery. Remember a big part of SEO is in designing for the end user, if you get all the hits in the world but it doesnt make sense or look good to the end user, its all for naught and your rankings will go down. Make sure you have a good header for your category, and meta information is key here too
5. Customize your Products
1. Make sure here to use the key words for your meta title
2. Make sure here to use an awesome description for your meta description
3. The more information and images for your product the more your customer will feel like they are making an informed decision, and be aware of your image filenames and titles
4. I feel its important to make use of the "related products" in order to maximize potential, and also provide your customer with ease of seeing which products work with which.
6. Speed up your Website
1. Since search engines are now considering the speed of your site in rankings, but of course you also want your customers to have an optimal experience, you will want to make sure your install is running as fast as it possibly can be. Now to be honest - this is tricky since Magento is such a beastly beast. But here are some ideas:
1. install Fooman speedster http://www.magentocommerce.com/extension/457/fooman-speedster
2. enable gzip compression
1. go into .htaccess and uncomment this part in the .htacess: (Line 52) 
   #php_flag zlib.output_compression on 
2. http://www.magentocommerce.com/boards/viewthread/7100/
3. uncomment the mod_deflate section in the .htaccess file
4. Enable caching for top four, not bottom 3
1. enable cache for configuration, layouts, block html output, translations
2. disable cache for collections data, eav types, web services config
5. Enable compilations under system, tools, compilations
6. Go to CMS and edit your homepage to remove layout update xml in custom design
7. Enable css and javascript merge in 1.4 (they are in bet so be cautious in this)
8. Go into your phpmyadmin and repair and optimize
9. Uninstall any extensions you don't use
10. Enable flat catalog under system config
11. Use a dedicated server rather than a shared server
7. Use Sitemaps
1. go to catalog/googlesitemap/addsitemap and create sitemaps
2. make sure you use google webmasters and insert your sitemaps there
8. Design for the End User
1. we are all sick of seeing it by now, but if you trick people to get to your site, or don't have the site to backup your claims or let them easily see how you backup your claims (claims being the keywords that got them there) they will give you a high bounce rate, leaving you with dropped google rankings
9. Navigation
1. one of the most important things you can show your customers is how to find things on your website. make sure your navigation is logical and clear, this will also assure the crawlers to properly determine what is most important
10. Get you some good inbound links
1. be involved in your community and go find your customers elsewhere and encourage links with badges/buttons/etc
2. use google to determine who is linking to the competitor and see about getting links to you too
3. do NOT waste your time on linking schemes - google knows - and you will pay for it.