I’ve been asked recently “What does the Reno, NV mean when it displays at the bottom of a sponsored ad?” I’ve been able to give a pretty good basic explanation, stating something to the effect that it has to do with regional targeting.
Much to my happiness — Inside AdWords recently released a more thorough explanation. They state that users searching for your terms, from within your targeted region, will automatically see the location displayed beneath the ad. There is nothing you can do to prevent having the location display as it does, shy of not using regional targeting. The location is based on the region you have targeted, yet it can also display the location the user is in, based on their IP address.
Pretty cool beans if you ask me. (especially if you’re targeting Boston)