Google Webmaster Central launched the ability to set the "geographic target" of a particular site within Google Webmaster Tools back in late October of last year. We have been gleaning hints and tips on if it works and how well it works from the forum threads since.
A recent WebmasterWorld thread reports that it can take up to 6-8 weeks after setting your geographic target for Google to pick up on the change and implement it through to the country specific level.
Here is a quote from the individual who tested this out:
I've domain.com hosted in US for years. (PR6) No connection with UK apart from natural incoming anchor text containing "UK + kw." Domain.com is now ranking highly on "UK-only results" on G.co.uk. Until now, you either needed a .co.uk domain or UK hosting to be listed on "UK-only results". However, the recent country targeting in the Webmaster Tools was set to "UK" about 2 months ago but I didn't spot the SERPs change until now.
Conclusion A: You can now host anywhere with any domain and will appear in Google's "country-only" SERPs within 6-8 weeks.
But at the same time, he found that if you have a .com and a .fr or something else, it can hurt you not to use the select geotarget feature. Why? Because the .com can begin to automatically be set by Google to do well only in the country specific results and then the .fr will be overshadowed by the .com. The only way around that, in these cases, appears to be to set the .com for US and the .fr for France, as an example.
I am personally going to be testing this out with a couple clients soon, so I hope to be able to add my two cents within a few months.
Past articles on the Geographic feature: - Set Geographic Target in Google Webmaster Tools - Setting the Geographic Target in Google May Not Limit You to that Target Area - How Long Does it Take for Google to use Geographic Target Data?
Forum discussion at WebmasterWorld.