TwitterLocal lets you search for other twitter users that are located close to you. It is US-based so the distance units are in miles (ideally future updates would allow users to select miles or kms), that aside, simply input your location, select the radius of search area, hit go, and you’ll be presented with a list of twitter users in your area.
These results are available in an RSS feed, simply subscribe to the feed, and if any new users in your area join twitter, your feed will be updated.
A great service, one to watch for the future, as social networks grow, the need for better discovery techniques become increasingly important.
More @ TwitterLocal.