If I, living in the US, want to purchase a UK edition of a paper book, I can go on Amazon UK and do so. Likewise if I live in the UK & want to buy a US book; I used to do it all the time. If a book has been published in the US but not in the UK, there are ways that book can get into stores in the UK; that's how my PERSONAL DEMONS ended up in my local Waterstones. The manager was a UF fan, and I just walked in one day and there it was. You can't do it for ebooks, generally, no.
It's my understanding--just based on experience, not on any legal knowledge--that while it's okay to purchase one or two copies of books from other countries, but more than that and they'll tell you no. I assume this is to prevent unauthorized resales or whatever. But it's not, to my knowledge, illegal for Amazon UK or whatever to ship a book or two to another country; it happens all the time, and no matter what I think of Amazon I seriously doubt they'd be openly breaking laws and risking serious legal troubles to sell a couple of extra books.
Also:
When large NYC based pubs contract books with authors they buy the full gamut of rights--including translation rights--for this very reason. Keep in mind most major US NYC based pubs are branches of publishers based in other countries, so they want all those rights in case the book is a major bestseller.
Those houses certainly may TRY to take the full gamut of rights, but most of the time they don't get them. It's usually shooting him- or herself in the foot for an author to give up all those rights; it makes it impossible to then sell them separately and get more money for them. If they believe the book will be a major bestseller, they can pay extra for those rights, or they can have their other divisions make a pre-empt offer or bid/offer quite a lot for them, but if the project is that in demand no agent in his or her right mind would allow World English and/or other subsidiary rights to go without some major cash laid out for them.
That includes things like audio rights, graphic novel rights, etc.
They will translate that book into other languages. (The Harry Potter books come to mind.) They then issue books through their other branches in the other countries in question. (And for the record, those US book publishers are really US divisions of multinational corporations. Random House is owned by a German corp, and Penguin Group US is actually based in England. Penguin Group makes up a lot of the US publisher base including Berkley and ACE. Off hand the only independent publisher I can think of is BAEN, and if I'm not mistaken they get their distribution through a larger company but I don't recall which one off the top of my head.)
They
may translate those books into other languages, if it's successful enough. They
may issue books through their non-US divisions (although usually I don't think they print them in the UK, they just provide some to distributors, IF they want to; again, unless the book is very successful). That's another reason why it's not to the authors' benefit to sell world rights.
My series sold in the US to Del Rey (Random House). My agent sold audio rights to Blackstone Audio. Then we sold UK/Ire/Aus rights to HarperUK. German rights to Egmont Lyx, and Polish rights to Amber Publishing.
Had we not kept those rights and sold them separately, not only would we have missed out on a very nice chunk of money, but there is absolutely no guarantee that at this moment my UK/Ire/Aus readers would be reading the books, or my Polish readers, or my audiobook readers (the German editions don't start releasing until Feb 2011). It's entirely possible--and likely--that Random House would have waited to see how the book performed in the US before issuing a UK release.
Not to mention that while yes, Random House is owned by Bertelsmann, Random House US & UK are not two halves of one company. They are separate companies, with separate accounting on their individual levels, separate CEOs, editors, etc. etc. A book that RH USA may be very excited about may not do diddly for the RH UK people, and thus may not get released there. My contracts with Random House are with Random House US, a division of Random House, not Random House worldwide or Bertelsmann. My contracts with Harper are with HarperCollins UK, not HarperCollins worldwide or with News Corp.
Here when you buy any NYC published book there are two prices on the back. One for US sales and one for Canadian sales. This shows they have the right to distribute and sell the books in those two countries in a single edition. Other editions are different and are printed locally--in England for example--for sale there.
By limiting territory, you also limit your sales.
Yes, US and Canadian rights are generally bundled together as "First North American." My Harper books only have a recommended UK price on the back; I don't know if that means they're being printed separately in Ireland and Australia or if different editions are being printed or what.
But by limiting territory on paperback books, you severely limit your opportunity to make as much money as possible from your work. It's not generally a good idea, and that's why no one does it unless they have to.
If your book is ebook-only that's different, sure. I happily sell my world rights to EC, for example, because ebooks can be distributed worldwide, sure. But that's not alway the best thing and it won't always be the best thing.
Selling world rights isn't the best way to make sure you reach more readers. Selling world rights is generally a good way to earn less money and have less control over which readers in which countries get to read your work.