Competition Level

If by "high" and "low" you are referring to what shows up in the Adsense Keyword Tool, that has nothing to do with the competition level of the search results. That only refers to the competition of the AdWords buyers.

I'm assuming you are talking about the "low", "medium", and "high" levels of competition that Google displays in the keyword tool. This is the level of competition between ADVERTISERS for a particular keyword. A "high" level of competition in the Google Keyword tool is a good sign for someone trying to make money from Adsense; it means that people are fighting over that keyword and driving the CPC up in the process.

The key is to find a highly commercial keyword (buying keyword) that has an available EMD domain. In regards to how difficult it may be to rank that keyword, you will need to check how many other websites use that keyword in the Title and URL. Under 100k results will usually indicate that you have a good chance of ranking.

The last thing you want to check is the top ten results for the potential keyword. Look at each website's domain age, number of backlinks, PR, number of indexed pages, number of social factors, and other similar metrics.

If it looks like you can compete with the top five results, then you're good to go.