Google has confirmed a bug with region targeting in the AdWords advertiser console at WebmasterWorld. The bug appears to be an issue with when you set the regions you want your ads to be targeted towards and when you hit the save button, it shows you an error.

AdSenseAdvisor, an official Google representative, confirmed the issue on October 29th:

There has been no update from Google since that post and the one who reported the issue said it is half fixed. He explained that the changes seem to go through, but it does popup an error, which makes it confusing. In addition, he is not confident the targeting is correct and is concerned to use the feature:

He said:

Forum discussion at WebmasterWorld.