How should I set up my links?

I'd like to have my keywords optimized within my links. What would be best?
For example if my keyword is boy birth announcements:
http://www.baby-photo-announcements.com/boy-birth-announcements.htm
or
http://www.baby-photo-announcements.com/boy-birth-announcements/index.htm
or
http://www.baby-photo-announcements.com/boy/birth-announcements.htm
or
http://www.baby-photo-announcements.com/birth-announcements/boy.htm


Thanks in advance!

All the links you mentioned look very spammy. Try avoiding too many "-" in your links, especially your domain name. Plus, it is very hard for people to remember these long hypened names.

All 4 are pretty much the same. If I have to choose, I'd go for these two because they have one fewer hyphen.

http://www.baby-photo-announcements.com/boy/birth-announcements.htm
or
http://www.baby-photo-announcements...cements/boy.htm

Keywords in domain names or links play a very minimal role in rankings.

Try /announcements/birth/boy.htm

Rational: in the great scheme of expansion "announcements" can have multiple sub-categories e.g. engagement, wedding, anniversary, burial, etc.

Birth can be sub-divided to a lesser extent to immediate family, friends, distance relatives, etc.

Thus the category name conventions aid to the overall relevancy of the website and phrase matches in volume rather than "only one".

I thought it was good to use the hyphens. I read somewhere that it helped the SE's seperate the words?

There is nothing wrong with hyphens they are a word separator to search engine bots.

Shorter is better though for usability, user appeal, and rememberance.

Ok good. I guess what I'm wondering is...
Does it make any difference if the keyword is the actual page name or if it's the name of a folder? I have someone else working with me and I've given them FTP authorization of a folder within my website because I don't want to be working over each other. I noticed that when you search for something in Google it's important that the keyword is in the link. I just wonder if it will matters if the keyword is the folder name rather than the link name. Does this make any sense?
For example:
/keyword/index.htm
or
/keyword.htm
or
/keyword/keyword.htm

I'm sorry if I'm confusing.

If keyphrase is something specific... a directory and page name precisely named as the phrase would be a best bet for "that specific phrase"...

The problem is that most websites have more than a single phrase that is searchable, clickable, and ultimately sellable on the same/similiar topic and that "page" in the only page that illustrates these other phrases (or is a best match).

Therefore is you target precisely you will aid to best search ranks for precisely that term at the expense of other terms.

SEO is a game of tradeoffs - you cannot be the end all to be all in ranks by precisely matching a single phrase thus "advance planning" is single most important part in SEO.

Otherwise, you will achieve what you wish (get #1 ranks for a phrase) and then what? Target something new... course this means:

1. undoing what you achieved for the 1st phrase,

2. spam tactics so you can keep the 1st and gain the 2nd, or

3. making your website totally search engine friendly but jeopardizing patron's ease of use (make your website unfriendly to patron)... get tons of ranks, and tons of clicks with tons of back-button use because your website makes no sense.

Plan, develop, and implement web designs that are primarily built around your target users NOT search engines. Like any business you want your customers to remember your name and your location (your site name and url). Secondly, once inside, you want your customers to be attracted to and feel at ease with the way you have decorated and arranged your store (site design and ease of navigation). Once inside and looking, you want your customer to spend time looking at your products (non-confusing product offerings and pricing). Finally you want them to buy and leave with a smiling face (ease of checkout will bring them back again).

Bottomline: We develop and work on these websites to attract and sell customers NOT to impress search engines. Think of your customer first... then worry about pleasing the search engines.