SEO and Server Location
Some search engines, Google included, often use a web server's location in their ranking formulas.
Relative to other techniques such as keeping content up to date and obtaining as many incoming links as possible to your website, server location is a rather minor concern, but still worth considering.
It is known that Google considers the top level domain when rendering search results. For instance, if a search query originates from the UK, Google is more likely to rank .co.uk domains higher than other top level domains.
However, the top level domain isn't always useful in determining a website's location. .net, .org and other top level domains don't correspond to a geographic location as .co.uk does. In these cases, Google may consider the IP address of the web server to improve search results.
What does this mean for you? If you're website primarily servers customers in the UK and your top level domain is .net or .org, it may be worth the extra effort and expense to host your website from a UK based server.