They go out to Google Keyword Tool, log in with your credentials and get a list of words.Some will go the extra step and go to Google and scrape related searches from the suggestion box and Youtube & Amazon.
Most of them will try to assess how competitive a keyword is by looking at how many websites have the it in title or URL and/or searching for it in quotes.
This software is perfect for:
1) Getting ideas for authority sites that attract hundreds of thousands visitors per month
2) Niche affiliate marketers and product creators
3) Article marketers & Squidoo lensmasters
Here are 3 elements that will allow you to measure keyword difficulty...
1) The overall domain authority of websites ranking for your particular query.
2) The popularity of the page that's ranking
3) The content & other metrics
Probably the Best Keyword Tool on the Internet with all the Google updates...