Whenever I go to a website that asks for my location I wonder what exactly I am giving out. I found a neat Safari 5 extension from Upper Atmosphere called FindMe. FindMe displays your location in a tool bar. Your location is just a button press away. You can also click on the result to display it on a map.
Interestingly, Mac OS X Location Services are only available if you have a wireless connection enabled. I would've expected Apple to default to your external IP if it couldn't determine your location based on your wireless connection, but it doesn't.
Most people probably already know where they are but this tool is surprisingly useful.
[crarko adds: I tested this, and it works as described. It asks for permission to find your location just like an iOS app would.]
Mac OS X Hints
http://hints.macworld.com/article.php?story=20100831130124311