Particlewill, if one obtains a judgment in country A in a particular matter, but it is against a company that only has assets in country B, the laws of country B may well provide procedures for the country A judgment to be registered or otherwise given effect, within country B.
Whether this will occur varies depending upon the two countries involved, what the judgment is for and so on. I can’t recall off the top of my head what the situation is as regards an Australian tort judgment and enforcement in the US. If I find the time I may attempt to look it up and get back to you, or maybe there’s a US attorney reading this thread who could comment…
Ed, the situation that you raise is by no means an internet problem. The internet simply makes broadcast publishing easier. And anyway, if you had to pay some lawyers to defend a defamation suit, you’d be much better off paying Australian lawyers, cos it’s sure as hell going to be cheaper than paying US lawyers 
Not only that, but in many countries, such as Australia, legal costs are awarded against plaintiffs who lose. So it is much more risky to file a bullshit suit against someone just to shut them down in Australia, because if you lose…
Gazpacho, I’d really like to hear your model as to how you say the internet should be regulated. You say that you think it not unreasonable that there should be some regulation.
How would you decide where one can sue for defamation?
I appreciate that your major concern is to avoid litigants shopping around for a jurisdiction that suits them.
The problem as I see it is that if you decide that the decisive factor that will control jurisdiction is something that can be controlled by the publisher, then that simply reverses the problem because the publisher will shop around to find a jurisdiction in which he can’t be sued.
There will always be some country that the publisher can find that has no effective defamation laws.
If you say “the appropriate jurisdiction is decided by reference to the location of the server” then all smart publishers will just move their content onto servers in “Nodefamationlawsonia”.
If you say “the appropriate jurisdiction is decided by reference to the intention of the publisher” the publisher will always say their intention was to publish only to persons in “Nodefamationlawsonia”.
If you say “the appropriate jurisdiction is decided by reference to the residence of the publisher” smart publishers will set up a $2 off shore subsidiary in “Nodefamationlawsonia” to front their website.
I say again, what is your suggestion?