So if it comes down to a tie on all sides, go with the firm that is local. The firm does work for Nike, but it is a small piece of the pie. If so, the firm probably has a good perspective of what your unique needs are. Don't write off a firm just because a client or two dropped them. Sometimes it isn't the firm's fault.
Clients are fickle folks, especially big clients.
Changes in management, philosophy, business direction, or even just plain old corporate politics can force a change in web development firms. I'm out of space for this week. ClickZ is kicking me off my soapbox. Then we'll finish up with how to compare the proposals you get back. And what to ask for when negotiating the final contract.