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bill - 1:16 am on Oct 9, 2008 (gmt 0)
A local domain name has a few SEO benefits that you wouldn't get with a subdomain. It also shows a more direct commitment to the local market.
My company's Brazil office suggested we go with a .br domain and not a .com. There are a number of third level .br domains [nic.br] to choose from. The most popular is .com.br