Erica in Washington asked a great question about SEO with regards to the hosting of a site. This was actually a tough one to answer because really there is no concreate answer from the search engines on this topic.
This is one of those questions that we are often asked (as to how hosting in one country while trying to rank in another affects rankings in the search engines) that has proven difficult to answer. For example, let's say your website is hosted in Canada, yet you want to target the United States. Does the fact that your site is hosted in a different country affect your rankings?
The answer is yes. At least right now this is how it works with the engines.