Before I begin, allow me to thank the fantastic blog "Understanding Google Maps and Yahoo! Local Search" - I highlighted three blog entries at the bottom from the blog which helped me form my ideas.

Local Search Optimization has a chance to become its own niche market (if it hasn't already).  I found one SEO firm running AdWords for "Local Search Optimization" - I expect there to be much greater competition at the end of the year for this term.

Usage of Google Maps was up 62% in 2006 as compared to 2005, and the number is expected to increase.  The one box, or the box above the organic listings which integrates up to 3 local search results with address, phone, url, and a corresponding map, is prime real estate. 

Example: Hotel industry 

At my interactive agency, we have a client who owns an independent luxury hotel. In our efforts to market the site, we noticed that while we haven't hit the front page in Google for our target keyword in organic results (yet), we were lucky enough to show up as the first local listing in the one-box for the target keyword.

Some of our link-building efforts rendered us a listing of the hotel and address but no link.  While we initially thought this provided us good exposure but no search benefit, it turns out to be a factor in local search optimization:

“In fact one of the first things you notice is that your “links” don’t require a link at all just an actual street address and a business name that matches what Google thinks it should be” (A. What does a link campaign look like for local?).

It also appears that the quantity and quality of consumer reviews (i.e: hotel reviews in TripAdvisor, CitySearch, TravelPost) are a factor in Local Rank:  Not only do you want to have as many reviews out as possible, but it helps for them to be positive: Google aggregates all of the user reviews on these travel guides and gives its own score. (1 to 5 stars).  Instead of offering link bait -- why not offer "review bait"?

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In certain situations, it can be of equal or greater value to be the number one local listing than the number one organic listing - SEO's should take note of this in their dealings with current and future clients, 

Supplemental reading:

A.  What does a link campaign look like for local?

B.  Best Practices for Local Success

C. 10 likely elements of Google’s Maps algorithm