I’ve found that, no matter how popular the key phrase is, if you aren’t in the top 10 the traffic you get isn’t worth the bother.
Although it is a bit more work, targeting lesser used phrases will give you a much better chance at hitting the top 10. For a new site, it is beneficial to target the lesser known phrases, and to target 3 word phrases or longer.
You can always include in that phrase popular key phrases to focus on as your website gains links and rank.
I have several popular phrases in the top 10, yet still the vast majority of hits I get are from phrases I haven’t even targeted specifically – thousands a month from those. Some of the darndest phrases….
That’s my two cents worth, anyway.