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tedster - 2:13 am on Jan 15, 2008 (gmt 0)
I don't know whether this decision is from AOL or Google - hard to say. But since AOL is the website hosting the search, I'd probably start there with any complaints. Their "Contact" page offers a feedback form for Search. This one surprises me. On the surface it seems like a real disservice to their users, especially when Google has the data available.
I just went to the aol.co.uk webite and did "UK only" searches such as "keyword inurl:.com" -- you're right, AOL is choosing to show only .co.uk and .org.uk for their "UK only" searches. Not so Google.co.uk, where any domain extension can be found.