Noddegamra - 10:12 am on Sep 27, 2011 (gmt 0)
I moved a site from US-based hosting to the UK a couple of years ago, yet roughly 90% of my traffic still comes from America. I always thought it would impact rankings, but it hasn't.
I think if you also add localised meta data as well, then it would have an effect. I haven't done that, which is probably why I'm still getting loads of organic US traffic through search.
EDIT: Interesting idea as well - does the way you spell things affect traffic localisation? For example, would using American-English spelling cause you to rank higher in the US, whereas would using British-English spelling make you appear higher in Google's UK searches..?