McMohan - 6:25 am on Aug 21, 2010 (gmt 0)
Wouldn't it be simple for Google to do it based on keywords? That is, if the keyword has a place (city/state/country) in it, why should a country .tld website be given a boost? The user, wherever s/he is, is looking for websites that are relevant to that place, whatever be the websites' tld, whois address be.
On the other hand, if keywords are without any place indicator, Google may well boost local websites, assuming a user say in India, searching on google.co.in for Life Insurance, implicitly means to see ranks of Indian insurance companies.
At least to this effect, I see the shift in Google SERPs.