sometimes you just have to follow the rules in the item description and with Dust of Appearance it falls a bit short.
Usually (at a minimum) spell effects appear in an area adjacent to the caster and I'd assume that here. So mark off a 10ft radius sphere adjacent to the user(caster). IF the user wants to be in the area of effect then he can be in it.
Consider it a glitterdust with a 10ft range.
As a GM you could rule that it has a range of 0ft and would affect the user. Just inform your player BEFORE he buys it.
Lastly, a GM could give it a range increment (5 or 10ft). Then it is just a matter of an attack roll versus the AC of a square (or target) with range modifiers. Usually this mechanic is used with bags of stuff that explode when they hit.