Location based SEO functions?

You could do this with a combination of PHP and Google's location services. If your not familiar with PHP, it is a programming language involving conditional if/else Boolean statements. So you could use Google's geolocation within a PHP conditional statement to restrict access contingent upon location.

Google Geolocation :

http://code.google.com/apis/gears/api_geolocation....

PHP manual :

http://php.net/manual/en/index.php

The Chinese government can do it...

I suspect the best individuals can do is to employ a script on your site that uses the visitor IP address to determine their country, redirecting the undesirables somewhere else, probably best to make it a dead end error page on your site.

You might see what a search for geo IP script brings up.

I can't see the point when there are many people browsing the Net through proxy servers. Nowadays you can't hide.