This article investigates the local maxima properties of a box-constrained quadratic optimization formulation of the maximum independent set problem in graphs. Theoretical results characterizing binary local maxima in terms of certain induced subgraphs of the given graph are developed. We also consider relations between continuous local maxima of the quadratic formulation and binary local maxima in the Hamming distance-1 and distance-2 neighborhoods. These results are then used to develop an efficient local search algorithm that provides considerable speed-up over a typical local search algorithm for the binary Hamming distance-2 neighborhood.