Thanks for pointing that thread out again Bill. Later on GG says reg. German dot-de domains:
.de is usually a good indicator, and I think we would always use that. Never hurts to host locally, but TLD's are a great signal about whether a site is relevant to specific users.
Claus I agree that hosting a local Danish language site in the Us shouldn't be a problem. However I sometimes hear about people moving hosting and getting dropped from local searches. Howver I recently heard about a US .com site that moved hosting to Canada and got A LOT more referrals from Google.ca.