Google has posted a new beta version of the Google Toolbar for Internet Explorer over here for users to test. The new version is currently a labs project only and brings location services to the toolbar. This allows Google to determine your current location, I believe based on your ISP's data, and then serve up local search results to you.

It is called, "Google Toolbar with My Location." The help document describes the features:

• Find locally-relevant search results on Google when local information is available.
• Center maps on Google Maps around your current location.
• See your approximate current location using the Google Maps gadget.

Google allows you to enable and disable the location services. It also doesn't tie the location data to your Google account.

Forum discussion at Google Toolbar Help.

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