Samanthatouch - 6:04 pm on Feb 15, 2010 (gmt 0)
It's really quite simple. It does not matter what country that you target. What matters is if people that click on the ads in your pages subsequently do whatever is considered a conversion action for that ad. If your page sends more buyers to advertisers then advertisers will pay google more to advertise on your page and then Google pays you more to place their ads on your page.
The book Wealth of Nations explains it better than I can. I believe it is free on Gutenberg.