What I've heard is that the extension has no effect on general SEO issues like keywords in the domain.

Where it does come into play is in which versions of SERPs your domain will rank highly--eg a .co.uk will do better in Google's UK pages than a .com, but worse in USA pages.

I haven't seen anything about such differences between the 'non-country' extensions though, like .com, .net, .biz

Personally I will only purchase a .com extension. It's not so much for SEO reasons as it is for ease of getting return visitors. To make a site sticky, you have to offer a name that people can remember to type back in - quite often, I will remember a site's domain name but will type it in wrong and not be able to find the site because it has a .net or .org extension.

I think it depends most on your target audience. If your site is specifically there for residents of a particular country then a country specific domain name will be easier for them to remember (unless the country is the USA in which case a .com domain name will be more effective than a .us).

If your site is intended for general use then a .com domain is best.

The other thing related to this is where the site should be hosted. If the site is country specific then hosting the site in that country will be faster for visitors. A general use site will be fastest for most visitors if hosted in the US.

some of the regional search index will give a boost to sites which
- are hosted in the same geographic region -or-
- have the local extension -or-
- have lots of links into or out of their site to other local sites

It doesn't affect search unless it's geographical.

On another note, I dont think your extension matters as much as people think, and I think it will matter less and less in time...

Have a look at this article to see where they're going with extensions

http://www.pcworld.com/news/article/0,aid,115409,00.asp