In a recent You Tube video, Matt Cutts from Google answers the question which is better (by better, we mean which does Google prefer) - keywords in the url or the filename?

For example, a url would look like this http://example.com/apparel/shirts/casual/polo.

Whereas the same keywords included in the file name would mean this: http://example.com/apparel-shirts-casual-polo

Before I heard what Matt had to say on it, I would say the URL approach and this is the approach we would recommend. Turns out so does Matt.

The segmentation involved in the URL example is more likely to reflect a logical content structure with keywords used sensibly and part of the navigation scheme, which is also going to make it easier to search optimise the site generally.

For the user, keywords separated in the url makes the result seem like a logical subsection of a product based information structure and therefore possibly has some legitimacy.

From a user perspective, the filename one http://example.com/apparel-shirts-casual-polo looks like it might be spam and therefore a user might be less likely to click on it.

Of course even having this is preferable to http://example.com/index.htm/cat+181258_89bin.etc.

According to Matt, it's unlikely to make a difference to Google (and he should know, right?), or at least having lots of hyphens in a file name won't get you penalised.

One thing that SEO practitioners agree on is that it is helpful to have your keywords in the URL.