tedster - 5:41 pm on Aug 20, 2010 (gmt 0)
I'm seeing this effect too. Something has definitely shifted in the way Google lists out-of-country websites in the search results on country versions of Google.
We know they've been playing with this over the past months - Matt Cutts even mentioned it in a video not too long ago, specifically in relation to the UK results. At that time, some UK webmasters were complaining about too many non-UK sites showing up on google.uk.
I can see that this is a balancing act for Google, and Google will continue to monitor and go with their own user satisfaction metrics. In fact, I'd guess that Google has just gone mainstream with changes they've been testing and tweaking for a long while at a low level.
We'll see how much of this change holds up in the coming weeks. I can say that the added international traffic I'm noticing seems pretty well targeted. The new international visiotrs are clicking on the search result, they are not bouncing from the site and they are converting as well as the previous traffic did.