I came across this entry in the Google Webmasters blog this evening.
Quote:
Starting today Google Webmaster Tools helps you better control the country association of your content on a per-domain, per-subdomain, or per-directory level. The information you give us will help us determine how your site appears in our country-specific search results, and also improves our search results for geographic queries.
We currently only allow you to associate your site with a single country and location. If your site is relevant to an even more specific area, such as a particular state or region, feel free to tell us that. Or let us know if your site isn't relevant to any particular geographic location at all. If no information is entered in Webmaster Tools, we'll continue to make geographic associations largely based on the top-level domain (e.g. .co.uk or .ca) and the IP of the webserver from which the context was served.
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So far Google has been associating geographical regions based on TLD ot IP. Where this fell down was if a .com was hosted in the US, but was primarily aimed at the UK market (I know of 1 webmaster who did exactly this). The Google rankings in this case were never great when searching with google.co.uk, however it would appear this new Geographical option should help target specific areas.
11-01-2007, 10:12 PM
Google allows selection of geographical areas 
left of post.
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