Experience. Statewide is OK, most of the time, but a mileage radius is generally beyond Google's ability to accurately determine. Google does geo-targeting by the IP address of the ISP, and really has no idea where the consumer may be, especially in cases where IP addresses are dynamically assigned when users log on. As far as Google is concerned, all AOL users are in VA or one of the other AOL data centers. MSN subscribers are all in WA. Many other large ISPs are in CA. For broadband users, geo-targeting is somewhat better, as long as the broadband ISP issues permanent IP addresses to its subscriber's cable modems, and lets Google and the other SEs know what IP ranges apply to what geo areas. but still not reliable enough. Trust me, do your geo-targeting with your keywords.