One of the recent additions to MSN search that I enjoy is that I can now type in the word weather and  it will try to figure out your location based on your IP address and the return to you the current weather conditions along with a 5 day forecast.  You can also type in a city name followed by the word weather and it will give you the weather information for this location.  I am a fan of us using IP and other information to figure out locaiton and then direct the results when appropriate to that location.  For example a query for Movies  will use the same technology to determine your location and give you a list of movies playing at a nearby cinema.  Also local keywords like Fedex or Plumber and it will also try to use your location and give you a listing "answer" for relevant businesses near year. 

Reverse IP is not perfect by any means.  I was using my Verizon EVDO modem the other day and tried the weather query and got the weather for some location on the east coast even though I was in the Sacramento area -- cleary not what I was looking for.  However, it is often close and this will improve over time when combined with other technologies such as using Wireless 802.11 SSIDs to approximate your location.  We currently use this in local.live.com in addition to IP addrees but we are not yet using this in core web search.  Here is a post from Chandu on the Live local team talking about the features and how we are using the technology and how we are protecting privacy which is absolutely essential with this type of feature.

Right now we use this technology to insert a relevant local "answer" above the core result.  The web results themselves are not currently altered in the above features.  We are also working on doing this with core web results.  We are trying this currently with a feature called near me.  This  feature attempts to categorize results based on an infered location.  Here is the detail on this feature from a post back in 04.  You can see this on the site when you click through to a local search result such as the following.  In this example I chose a nearby city to seattle -- Bellevue.  The restaurant is acutally located in Seattle.  We get the main web site for the restaurant but get confused on later results where there is one apparently from Boston.  This is not an exactly science at this point but it can often be helpful in getting to the "right" local page.

This theme of altering results based on location I think is an important one and one that can really make it easier to find information that is relevant to your current position without have to jump through a lot of hoops.  Clearly this work is just beginning on our engine and others but it will evolve rapidly.

Christopher