This is something I've noticed both looking for information, doing web searches, and in my server logs. With all the questions and advice about using key phrase suggestion tools and intentional misspellings to pick up serch trafik.

I've got a few questions about what I've learned, and, even if this isn't the new earth-shattering tip that will get you a billion unique visitors a day, I thought I'd share what I've noticed.

1. Abbreviations. A lot of the searches people come to my site through have "mtn" in them. That word doesn't show up anywhere on my site, or in any of the text links I've created myself. Maybe someone else is doing this on my behalf, but that's not why I'm coming up. See the quote below. Also, "mt" expands to Mount. "co" becomes Colorado, "az" becomes Arizona, but curiously, when they're used together, it doesn't find any documents. (Source: Google)
2. Plurals, partials, and more. My site is the #1 result for "camp view Ouray historical" even though I haven't used the word "historical" anywhere. "Historic" is highlighted in the SERP, from the page text. Gmail's search doesn't do partial words, or didn't when last I checked, so this is a surprise to me. Also, I see "mtns" in my logs. Same with someone searching "photos" and landing on a page of mine that only has "photo."
3. Synonyms? I see "scenic" in my referral logs under search phrases, here and there. Off the top of my head, I think I've used the word once on my entire site: Going to the Sun Road, in Montana, is described by almost everyone who's been there as "the most scenic 50 miles of roadway on the Continent." I have a gut feeling "scenic" is translating to "landscape" in visual art contexts, but I can't find a query to show that.
4. Context? I'm sure any of us can only guess at this, but "co" could just as easily be company. I read enough news online that it could be an abbreviation for either.

Example:
Google result for "rocky mtn photos" - notice what they bold.

Rocky Mountain Photo Gallery

Rocky Mountains Gallery. Waterfall, Glacier National Park Waterfall, Glacier · Sunset, Yellowstone National Park Sunset, Yellowstone · Rocky Mountain Sky ...
forrestcroce.com/Galleries/Rockies.html - 8k - Cached - Similar pages - Note this

This saves a lot of trouble deciding whether to optimize for, say, Mt Ranier vs Mount Ranier. Although, somehow, I score a little better for "rocky mtn photo" than "rocky mountain photo" even though the reverse should be true, if mountain is the actual text I've used. It also means Rocky Mountain, like the park, specifically, versus Rocky Mountains, is a non issue. Did I mention I'm a perfectionist, enough to almost be OCD?

That doesn't solve Cascade Range versus Cascade Mountains, or High Sierra versus Sierra Nevada. Still need some intelligence, although it seems obvious Google is getting a lot more intelligent, quickly, too.

What are the implications? I think people who do SEO would be smart to focus more on business and marketing, ideas that have stood the test of time, and less on the details of Google's algorithm. On the other side of the coin, I think this will probably make content a little more important. Especially if this is the tip of the iceberg in terms of what they can do.

I've seen this phenomenon before:

http://72.14.205.104/search?q=cache:...&ct=clnk&cd=12

This doesn't necessarily mean it's right (I saw this happen with a canon.ca web page once) but apparently someone's linked to your site using "mtn photos".

Mind you, this could be related to abbreviations, as you said. I'm thinking this is a side effect of Google Maps...people typing in AZ or Arizona, ON or Ontario, etc.

Interesting ... the cache header says the term appears in links pointing at the page, but I can't find them. "mtn photos Forrest" returns two results, and neither of them point to me.

I hadn't considered what I was seeing being linked to their maps and Google Earth, but that's a good theory. "CO" bolds "company" in the SERPs, but only starting on page 2 for the query I ran. So it looks like they're expanding abbreviations, but giving them less weight than actual matches?

I think Google is much more sophisticated in understanding abbreviations and similar words than they once were. How much a part it plays in the algorithm I couldn't say. But I do think it's playing some part. It's one reason I would suggest people write naturally instead of always trying to cram in every last keyword on a page.

The algorithms used for highlighting text and for ranking are different though. They'll parse forrest_croce to highlight forrest, but they see forrest_croce as one word when it comes to ranking. Why they can do it in one place and not the other I don't know.

They do seem to understand abbreviations at least as far as the bolding algorithm Search for 'seo' you'll see the words search, engine, and optimization in bold in the results.

I read Google is going through a shift from gimme what I typed to gimme what I meant?

That's what they're trying at least.

Next will be tell me what I should read, followed by them simply saying "Sorry you're too dumb to understand that page. Try this one instead."

Well, if it helps my traffic, it's obviously a wise, carefully planned move on Google's part.