Okay, I've just tested your page in Chromium 9.0.597.84 (72991) Ubuntu 10.10 
and I got the same behaviour, that means:

If I deny Geolocation, the map shows up and an InfoWindow says that it 
failed to locate me.

However, if I allow Geolocation, the map does not show up and I got a gray 
screen. After resetting my choice, I have to restart the browser in order to 
be asked again if I want to allow or deny locating me. But as you said, the 
source codes are absolutely identical. Did you try your local page with 
Firefox or another browser? Maybe it's not an Maps API but Google 
Chrome/Chromium related bug with geolocation on locally hosted websites 
(i.e. URLs with file:///)

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