Multi Country website - Using locales is the best approach?
Yes you can do this by going to the craft/app/framework/i18n/data folder and copying the language file for each occurrence.  You must give each a unique name es_pn, es_co, es_nc.  Inside each of those files you must add each of those names along with the long form name. 

languages =&gt; array(
'es_pn' =&gt; 'Panama',
'es_co' =&gt; 'Costarica',
'en_nc' =&gt; 'Nicaragua',


From here you would select each of those locales from the CP and setup the rest of your site as you would for multiple locales, using your custom ones. Updates have currently never broken this.  We have been using this method for several clients, it works well.