On the php|architect site Jeremy Kendall has a new article looking at geolocation in PHP and how, despite some comments in the past about its difficulty, some more recent tools make it relatively simple.
Have you ever wanted to add location-aware content to your web applications? Would you believe me if I told you it was dead easy, and you could be up and running in about 10 minutes? The first thing you want to do is use someone else's work. Geolocation is a solved problem; there's no need to roll your own. I went searching for free Geolocation APIs and found two I wanted to try: MaxMind's GeoLite API and Quova.
He briefly introduces each data source - GeoLite as a downloadable database and Quova as an API. Sample code is included for using the data from both of these services to find a location based on an IP address. He does include one caveat though - be careful about accuracy, they usually only promise things to be within 25 miles of the spot you're actually looking for.