In the early days of SEO, actually, before the term was even coined, very few companies understood the importance of search engine positioning, let alone what techniques could be used to improve it. At the same time, there were still relatively few sites competing with each other for keyword positioning, making SEO a simple and very rote process for us.
The landscape has changed significantly since then. Where there might have been 150,000 pages competing for a certain keyword, there now could be 15 million. Search engines have become much more sophisticated, requiring marketers to jump through many more hoops to have their pages deemed as important content. And, SEO firms abound, creating a much more competitive market for site positioning.
From our experience, SEO firms that today offer guarantees provide a promise to do something that ultimately is of little value to the client. They guarantee to position a client on X number of search engines for X number of keywords, with no promise that the results will show up on Google, Yahoo or MSN or for high-traffic keywords.
They also promise to "resubmit" their client sites monthly; again, a worthless proposition as search engines no longer require any sort of submission to index a site.
So, how do you determine what to believe from a company offering such guarantees?
You don't. You just run -- fast, and far away, with your hand on your wallet.