This morning when I launched iTunes, it thought I lived in Switzerland. After some looking around online, this appears to be a wide-spread bug, that was first thought to be associated with yesterday’s release of iTunes 7.0.2. But, it now appears to effect older versions of iTunes as well (I’m running 7.0.1).
The bug seems pretty harmless, and easy to fix. Simply go to the iTunes store, then scroll down to the bottom and change the store back to your actual country, using the pull-down menu. After that, iTunes should remember what country you live in, even after quitting and relaunching the app.