Google Local results

[rockcoastmedia]

Does anyone know how the Google Local results are ranked? Are they using some sort of algorithim, might it be clicks etc.? It does not appear to be based on distance from the center of town, alphabetical order, user rating, or even match the main SERP.

I would like to start working with Google Local but can't figure out how to imporve my ranking in that system.

[rockcoastmedia]

Just to follow up,

Does it matter if you have a web site is linked in the local results, or can yuo just link to a profile page on a chamber of commerce site etc. I would think that might even be better as the chambers are all very locally centric.