I didn't start RPing in City until just this past January, and I started playing in July 2004. I really like the idea of a close-range chat channel.
In a place like Pocket D, I shouldn't be able to overhear conversations taking place a floor below or above me, because ICly, there is supposed to be music throbbing throughout the area (regardless of what my Music setting is at). I shouldn't hear the monkey-fight when I'm at the upstairs bar on blue-side, nor War-Witch's or Isaac the Bartender's casual remarks to passers-by. If those were set to Near Proximity, I personally would find it more enjoyable.
I could see setting up personal social actions as:
/em salutes $target with a lift of her drink$$intimate I think that's an awesome idea!
The Emote stays in 'local' chat, which would be visible, theoretically, from a hundred feet away, while what got spoken stays for nearby-ears only.
I support a local range/intimate RP channel.