Hi Mark,
I asked a similar question here and on a few other SEO forums a few weeks ago. Here is what I learned...
PPC (Bing Ads and Google Adwords) is very easy to fix. Just go into the settings for your campaigns and only target the countries you want your ads to show in. Later if you find that your results are poor in certain cities or states or provinces, you can even exclude them. Targeting your ads this way works very well and is very easy to do.
Limiting Organic results is not worth the effort. Though you can add a huge list of excluded IP's to your htaccess, you then slow down your site because of the computing effort needed to check each new visitor. What is worth the effort, is to go into Google Webmaster Tools and declare your targeted country or region. What I was told by a number of different responders was that doing so means that Google will not count poor site performance outside your targeted country against you.
For example, my US targeted site has a generic Bounce Rate of 60%. When I dig deeper I find that traffic from countries like Phillipines and India have a bounce rate pushing 80%, but that traffic from the US has a bounce rate of only about 45%. Since I have declared the US as my targeted country, Google is supposedly not counting poor performance from other countries against my site. I have set up "Segments" in my Google Analytics to only show US visitors, and that really helps get a realistic uncontaminated overview of how my true customers are interacting with the site.