Originally Posted by Kevin H
The simplest rule to follow is usability and readability for your user.
The H1 should define the content of the page for your user; and most times this will be, or involve, your most desired search term. This is also good practise - but only as relevant.
The H2 should be sub-headings to split the page content into readable chunks for your reader and also describe the content of that section of the page. Once again, it is likely that this will involve you 'main' search term as well as other 'important terms'.
H3 should be sub-sub-headings etc.
Just don't stuff them.
Only have 1 H1 per page.
Only use H2, H3 etc as needed to describe your page content.
DO use your search terms in them if it reads well and is relevant.
Nice description of how to properly use HEAD tags. Basically, think of your page like an outline. The main heading is your H1, the first sub-heading is H2, second is H3, etc.
Google can tell the difference, and as mentioned above, your most important KWs should be in the "highest" heading tags...