@ geographyrocks: it was good to hear from someone else who has a geographic limitation.. it's just something I haven't seen a lot of. Looks like I'm limited to a similar area that you were, as all my schools are NM, CA, and CO. Not a bad place to be limited to! I'm super lucky too because some of the best programs in the whole country for my major are in these states.
@ Cacao: I am no expert, but I wouldn't freak out too much about narrowing your list down. Granted, it would feel pretty crappy to be rejected by the only two schools you settled on. I agree with an earlier poster that research interests and faculty fit should be the first thing you use to find schools (or in my case, the second thing after location). I started with as big a net I could, and after a year, my list is now down to 4 schools, NONE of which are even remotely "safety" schools. I genuinely, really, truly want to go to each of them, because the research going on at each place looks both broad enough to expand my horizons, and specific enough to already match my existing interests. My next step is going to actually visit the campuses and meet a few of the key faculty I'm interested in working with. Are you able to do that at all?
Initially I was worried about the list being down to four, but I have become comfortable with it - but being comfortable with that smallish number includes knowing that my chances of getting accepted and getting a TA-ship (a requirement for me) become limited, too.