It's pretty important, and there are definitely geographies with lots of recruits nearby. The northeast, the south, and the midwest are examples. Of course, there are also lots of competing schools in these geographies too.
Recruiting in Pennsylvania will yield lots of kids in a 360 mile radius, but your conference competition are pretty close to them too.
Recruiting in Arizona or Colorado, you will likely have a few local kids all to yourself.
I personally like recruiting in condensed populated areas, tons of guys to choose from, and the battles with my conference mates are fun.