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I know that Google tells you how many times a certain keyword is used in a search. You can use the Google Keyword Tool for that. This tool also allows you to find out the number of "local" searches: this is the number of times a person from a given country searches for this keyword.

My questions: can you also find out how many searches originate from a given American state ? In the Keyword Tool, I can only select countries, not states.

Any other systems I can use to determine where people are searching for a given keyword?

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Try Google Trends. You can enter a keyword, then click country, then you'll see data by state.

Example: fergie is big in Nevada for some reason

http://www.google.com/trends?q=fergie&geo=usa&sa=N

Unfortunately Trends only gives detail for relatively high volume keywords.

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