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I highly recommend the Thesis theme - it has great SEO features built right in. Additionally, it has a really cool design framework called "hooks" which allows you to customize any aspect of your site.

All-in-one Seo plugin is very good.

To make on page SEO a bit easier I like to use the "All in One SEO Pack" plugin, for me thats the most important one. There's also a cool plugin that generates a simple contact form, I think its called SIS Contact Forms - I use that.
The other thing I suggest is you use a good privacy policy - I use one which can be found at the following site:
Google Adsense Privacy Policy Generator - Create a Privacy Policy Adsense

Hope that help,

Aidan

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Akismet: Taming the spam monster

I recommend Quick Adsense. It's a plugin that allows you to easily manage your adsense ads, and it's not complicated to use.

1. W3 Total Cache – This WordPress plugin is great for two reasons. First, it makes your pages load way faster. Second, since it stores static versions of your site, it requires much less CPU processing than using WordPress all by itself. This WordPress plugin is number one on the list for a reason.
2. HeadSpace: WordPress SEO Made Simple- Move over All in one SEO. There’s a new guy in town. HeadSpace provides you with the features you need to drive your site to the top. People spend way to much time working on SEO and too little time writing great content. This plugin let’s you put your focus back where it belongs. It takes care of all the SEO work that your blog will need.
3. Gravity Forms – This is without question the best WordPress plugin for forms. There is no competition. This form creates posts, allows image and media uploads, allows conditional logic, and so much more. It is the all-in-one form plugin for WordPress.
4. MaxBlog Press Affiliate Ninja – This WordPress plugin is amazing as it massively cuts down on the amount of time it takes to promote affiliate products throughout your site. It converts keywords that you identify, tracks clicks, and much more. You won’t have to keep chasing down your affiliate links when they’re all stored in your WordPress dashboard and doing the work for you.
5. WP-DBManager – This little gem is amazing for backing up your website. It actually has quite a few functions that it can perform but perhaps it’s most impressive feature is it’s ability to email the entire WordPress databse to me every day.
6. Thank Me Later – This plugin is great. It sends an email to all first-time visitors. You can write up the email to remind them about your RSS feed or just to invite them to connect with you personally. I do both.
7. WP-PageNavi – Those ‘Older Posts’ and ‘Newer Posts’ links are boring. With WP-PaveNavi you can get page buttons so users can go directly to whichever page they want. Plus they look a lot better than plain little links.
8. SEO Smart Links – Do you inter-link your articles? You should. Linking within an article to other articles is a great way to build Page Rank throughout your site and it’s a great way to get readers to find your other articles on similar subjects. This plugin will interlink keywords to your other articles for you.
9. Digg Digg Social Sharing – This simply WordPress plugin is what powers the floating social icons to the left of each post here at Site Sketch 101. With an easy to access Twitter icon, your friends and readers will be able to easily share and promote your content.
10. Feedburner Circulation – The era of the feedburner chicklets are over. Install the Feedburner Circulation WordPress plugin and you’ll be able to display your subscriber count just as you see in the top right corner of this page.
11. Revision Control – With the revisions feature of WordPress, it doesn’t take long for your database to get bloated and begin slowing down your site. With the Revision Control WordPress Plugin you can limit the number of post revisions that remain in storage. I have mine set to 2.
12. Tweet Old Post – If you’ve been engaging and building a community of friends on Twitter, then this WordPress plugin is the perfect way to sprinkle your posts into your tweets. It has options to add hashtags, leading text and more.
13. Widget Context – With the Widget Context WordPress plugin, you’ll be able to pick and choose which pages you want sidebar widgets to appear on. You can literally create different sidebars for different pages and sections of your site with this.
14. WordPress Editorial Calendar – This plugin provides a crisp, clean editorial calendar of your posts both past and present. You can drag and drop articles from one date to another, edit them and much more. This is an amazing organizational tool.
15. ReplyMe – This plugin sends an email to anyone who leaves a comment only when someone comments as a direct response to them. This is a terrific way to help continue the conversations that you’re working to build on your site.

I am running some wordpress blogs and use following WP plugins:
1. All in SEO
2. Page Nevi
3. Google Sitemap