A recent thread at Search Engine Watch forums discusses the improving positions of country-specific domains in the Google SERPs.
Whether this is a change in the algorithm or just that more international webmasters are developing increased links in the international community has yet to be determined. But the most insightful post discusses the fact that local inbound links have a big impact for results in that locality. If you are looking to improve your site for a specific country get links from that country - even non-topic specific links (though this I am going to test before taking it as a fact).
