Mindset while researching & choosing your VERY FIRST Niche and Keyword Terms

Hi,

I'm not new in IM but still did a very terrible mistake a year ago.
I joined IM almost a year ago and I thought rather wasting money on multiple domain name and then on multiple domain hosting services from the hosting provider, it's better to create a domain and then do the niche site building on the different sub-domains.
Boy..was I wrong!!
I put my life, blood and soul in searching and re-searching for the Niche (which turns out NOT good), in searching the keywords sets (which again turns out to be NOT good) and writing extremely relevant content to the theme of the site (sub-domain)...BUT after all this all I got was measely $1 adsense dollar and mind blowing 0 CB sales.

I know I did lots of mistakes but I guess I learned from them as well. Now I've made up my mind to make different websites for different niches. But one thing that I'm not clear of is that the despite all the keyword research methods I chose (Google KW Tool, SpyFu Research, KeywordSpy free, iSpionage free and other handy tools) the research was not upto the mark. Be it the product keywords, purchase keywords or information keywords. One reason what I think is that earlier I made the website acc to adsense, then when I didn't see much traffic then I changed the keyword set on product base..this might have messed up my keyword research totally.

I request all the experience warriors and webmasters to share the mindset and research techniques (free/paid) while doing a research for a Niche and keywords related to it.

I've lost one BIG year of my IM not doing what I was suppose to do. I don't want to waste 1 more year trying to figure out by trial and error. As "John Reese" has said number of times in his "Traffic Secrets 2", it's always better to do PIGGYBACKING and learn from superiors and experienced what they are doing or what they've done rather trying to figure it out yourself and wasting the time that you can use in implementing those ideas.

I'm currently planning to create bunch of websites for good adsense earning. So the keyword research techniques (after niche research) for particular high paying adsense keywords (that are getting decent traffic as well) will be really really appreciated.

Waiting response from all the WF members..be it newbie or experience.