I just signed up for and added two of my blogs to a new directory. It's called Loaded Web, and they call it the first fully geo-based blog directory. When you add your blog, you also choose your country, state/province, and city. Add a description and some tags and submit your blog for approval. They don't allow sites that feature adult content (nudity included), promote gambling, promote illegal activities, promote hate, feature warez, and/or are not blogs, so your blog has to be approved before it can be listed. It was really quick though. I just submitted mine this evening, and they're already approved and listed.
Now comes the fun part - searching the directory to find blogs in your neighborhood! I already found one from a neighboring town. Of course, you can also search to find blogs in other areas, too. It's fairly new, so there aren't a lot of blogs there, yet, but I think it will be fun to see where blogs are coming from.
Loaded Web is currently available for blogs from Canada, United States and United Kingdom.