Anyone who lives in even a smaller city knows the importance of neighborhoods. Portland (where I live), for example, is really more like a collection of many connected small towns. Each has its own handful of coffee shops and restaurants. The people behind GeoReach API (our GeoReach API profile) understand this. The API provides neighborhood boundaries, along with local content.
For anywhere in the United States, search by latitude and longitude coordinates and get back the boundaries of that point's neighborhood. With that, you can draw it on a map, or include use it to categorize data in your own local site. If you make light use of the API (less than 10,000 requests per month), it's completely free. Otherwise, you'll have to pay $99 or more per month.
There is also a local advertising component to the GeoReach service, though it is not mentioned in the API documentation. It's a good bet they're working on an ad network, ala Lat49 (our Lat49 API profile) or Google's AdSense for Maps service that we covered last year.