Google r0x0rs. Utterly. But there’s a couple of things they can improve.
If they’re clever, they should read sites like those done on WordPress and work out how to index the content at the permalinks, rather than the front page, so that people can find content on sites that have frequently updating front pages. Example: Geekrant is currently top hit for “melbourne itrip frequency”, but it’s pointing to the front page, and is no longer on the first screenful. It will have fallen off the front page in the next few days.
They need to realise that sites hosted in country X are not necessarily about, native to, or located in country X. A better way would be to check the country of the admin contact of the domain. (Tony mentioned an example of a .co.uk site he did for somebody; it hardly rated on Google UK until he moved the physical hosting to the UK.)
Whatever means google uses to determine which country a site should be under is purely speculation. I thought there were multiple means that google used to determine the country. One being the IP address and another being the ccTLD. Though I’ve seen DMOZ suggested before.
That, and when you type the name of computer product X and the word “review”, you don’t get 100 pages of online IT shops, all with the words “Add your own review. Current reviews: 0”.