A good way to get a rough idea of how many people are searching for a particular word or phrase is to use Google Trends. Trends allows you to enter up to five words or phrases (separated by commas). Your results will show the relative number of people searching for each word or phrase.
Suppose you sell floor coverings and you're trying to decide whether to focus this month's online advertising on tile, plank flooring, bamboo, or carpet (we realize this example probably seems excessively simple if you're in the business, but we don't sell floor coverings!). You just type those words into Google Trends and you'll know which of them is being searched for most, which second, which third, and so forth. You'll have a good general understanding of the online trends (we're pretty sure that's what they call it "Trends").
There are a few things to keep in mind both about the value of Google Trends and about its limitations. Trends shows results for the entire English internet (though it does break those results down by geographic region), not necessarily for your city. It's more of a butter knife than a scalpel. It's also true that just because lots of people are searching for a particular term doesn't mean they're going to find your website. We'll talk more about how to become successful by avoiding the most searched-for terms, but for now we'd just like you to keep in mind that Trends is more of a tool for getting to know the big picture than it is for developing a detailed keyword list for your website.
One neat aspect of Google Trends that can be helpful for websites dealing with hot topics or current events is that it shows spikes in searches and correlates them with major news stories. That can be very helpful if you're researching when to emphasize certain words and phrases and what information to correllate them with to take advantage of surges in search numbers.
Once you've got an idea of the big picture, it's time to go to step 3: the Adwords Keyword Tool.