Based on another thread here on MR on the same subject, my understanding is that the author (or author's agent) contracts with the publisher within a limited geographical area so that he/she can also contract with another publisher in a different area and perhaps make more money. Say Author contracts with PubUS and limits PubUS from selling anywhere but in the United States. He then contracts with PubCanada and PubFrance and PubEngland, limiting each to selling in their respective countries. PubCanada doesn't need to worry about competition sales from PubUS. PubFrance and PubEngland don't compete with one another. Everyone wins.
This, of course, is related to pbooks. It makes sense, sort of, if one is thinking about going to the local bookstore and buying a book. It loses all sense when one considers online purchasing, whether of pbooks or of ebooks.
My puzzlement is in that Amazon or another online reseller might sell a pbook but not the same book in ebook format, stating geographical rights. It would seem to me that if the publisher has limited geographical rights, it applies to both formats. Unless, of course, it is a different publisher handling the ebook... or the same publisher under a separate contract arrangement.
Nevertheless, I do believe the whole geographical rights thing is a holdover from pbook contracts that the authors/agents and publishers have not fully thought out. By limiting sales of ebooks geographically, they basically are cutting off their own noses, so to speak. Hopefully someone will see the light. I know it is a whole new world of publishing, but gosh, I've been reading ebooks since at least 2000, one would think in 10 years they might have realized a thing or two.
My thanks to alvico for posting her website - her books look interesting, and there are some really good links there, particularly http://www.ebooksjustpublished.com/
I'm all over DRM-free! That site has one of her books free till the end of April - I'm going to have to get it of course, and then assuming I enjoy the read, buy her others. Business a la Baen. Works well for me.