A Cre8asite Forums thread discusses the importance of obtaining links for ranking well within a specific geo-specific search engine. For example, you want to rank well for in Google Canada, you can try to (1) host your site in Canada, (2) get a Canadian top level domain (TLD), (3) Use specific Canadian attributes on the page (addresses, phone numbers, meta information, etc.), and (4) get links from other Canadian sites.
It is possible that your site be hosted in the US with a .com address and still rank well in Google Canada. Search engines may look at the number and quality of links you have from sites that are (1) hosted in Canada, (2) have a Canadian top level domain (TLD), (3) use specific Canadian attributes on the page (addresses, phone numbers, meta information, etc.), and (4) get links from other Canadian sites.
At what level does a search engine weigh the links compared to the other three factors mentioned above (those are not all the factors by the way, just the most important, I believe)? I do not know for sure. I think 1 and 2 are more important that 3 and 4 - but 4 alone may be good enough for some terms.
Forum discussion at Cre8asite Forums.