I like this idea, and I was thinking the same thing -- people do lie about there location.
A possible fix to that, would be, why not have it by IP address? Depending on the users IP, it'll display that location, such as someone living in tampa bay, it'll display Florida, United States, etc. (without exposing the IP).
Or even a added on bonus feature, such as some sort of graph showing a overall percentage of users in this this and this location, etc.
but anywho, I voted yes for the general idea