I'm setting up my freelance rate for web design services. In the states I would charge $65 hourly. Should I charge a lower rate if I'm working for a client in the states but I live in a country where the market rate is lower?
I think it all depends on your skill set and portfolio. It also depends on what segment of the market you're targeting. It also depends on where you're finding the work (elance etc.)
If you're finding work on sites such as elance, don't expect to get higher rates. People use these sites to find cheap labor in foreign countries.
If you're finding work based off of referrals, open source projects, etc. then you can probably get higher rates.
Of course, if your work is simply awesome then nothing else matters. Simple supply and demand will take over and you can charge whatever rate you want.
Figure out who your customer is and charge accordingly.