In SEO title tag is really important and should always be taken care of while you are optimizing your page for search engines. This is because of the reason that search engines high level of importance to those keywords that are found in the title page of a website. You should always choose that title for the web page, which describes your web page's content in the most descriptive way as possible.
It can be better explained by the example of an library, let's say you are looking a book for "On page optimization" and while searching for that book in library you came across a book titled "On page optimization techniques" , You will surely give that book more preference and you will read that once. However there can be many other books in the same library with better content on "on page optimization" but you won't look on them unless they have good title on them. Similarly in Web pages you should choose those titles that are encouraging enough to make surfer click on the link of your web page.
While choosing title for your web-page, there are few things that should always keep in mind
1) You should alway use targeted keywords of your web page in title. Title tag increase the relevance of your web-page, when some one search the web for that keyword.
2) You should always use short and readable title for your web-page. I will recommend you to limit your title tag between 60-70 characters because Google and MSN mostly list titles of around 70 characters including the spaces that are there in title however yahoo lists title of around 120 character . So, it's a best practice to limit your title length to 60-80 characters.
3) You should always use different title tag for your web pages in your website. I have seen many dynamic sites that have more then 1000 dynamic pages but they all have the same title for all of them. When each page have different content then why same name ? . You should avoid such scenarios and should always use different titles for different web pages of your website.
4) You should not use company's name in your title tag unless you think that company's name will attract more users . Instead of using company's name you can use that space for suitable keywords.
5) Do not simply list all the keywords in your title other wise search engines can suspect that as spamming. You should always use keywords in your title but you should make sure that title of your web page is a readable sentence and it properly describes your web page content.
6) You should not use your keyword more then twice in your title. It's always a best practice to maintain the keyword density of your title between 25-35 percent to get good result.
These were the few things that you should always keep in mind while choosing title of your web page. You should not ignore the importance of title tag as they are the powerful tool and you should take advantage of them. You should optimize your title tag for good search engine optimization.
