Last night, AdWords launched a new ad type for Google Local - Local Business Ad.
At the AdGroup level, one can create these ad types. On content match, search, and Google, they appear as a standard local ad type.
However, on local.google.com they take on special characteristics:
Ability to have a custom icon
Ability to use a 125x125 logo
Ability to control your local business data (i.e. display special phone number, ad, etc).
The requirements for adding one of these ad types is that your business must be listed in Google Local.
If you're not listed in Google local, you can add your business through the local business center (sends you a pin card in the mail), through the froogle small business center, through Google base, or through one of the local data providers that distributes your data to all of the local search sites.
One is not charged for the initial view. So, the first ad click opens up an information box on the page. If one clicks from the information box to your website, then one is charged per click.
I've often talked at Pubcon [pubcon.com] that the local search engines need to provide premium placement for local businesses to help migrate the 12-22 million small businesses in the US to the web. This is a great step that Google's taken in assisting the SME marketplace in that move.