jdeeze, I do SEO in the UK and here's how it works:
If you put a site on a UK IP or use a .co.uk it goes in the Google UK index. It ALSO goes in the Google international index that the American's see. If you get links to your site you will outrank any US hosted site that has the equivalent number of (or even many more) links. This is because Google UK gives preferential treatment to sites based in the UK.
(Test this: try searching for "dog food" in Google UK - you'll see UK sites come up. However, if you go to Google international and search, you'll see different sites. Check those sites and you'll see they have many more links than the UK sites you just saw. Then when you go lower in the US SERPS you'll still see the UK sites).
If you want to rank well in the UK and sell to American's what you should do is:
- use a .com
- host in the UK
- link as usual
This way you aim to get the best of both worlds.
So you have an advantage when competing in the UK SERPS against US companies. AND you compete on the same footing in the US SERPS.
Links from UK sites -- well I haven't ever tried it and I have many top 10 (top 5) rankings in the UK.
Good luck.