As a major caveat, all geolocation services do have some degree of inaccuracy, because the sources of data are very diverse. (Some ISPs provide complete subnet maps to MaxMind and other providers, whereas some data is scraped from WHOIS or provided by inference from end-users.)
And some organizations run their own internal networks across international borders. In other words, knowing that subnet X is allocated to company Y who has a 300 meg Internet connection in city Z, does not mean that all the users of that connection are also in city Z. They could be scattered around the world. This is why some companies use other sources of data to infer the location, i.e. if users of an IP address prefer yahoo.fr to yahoo.com, then that is one datapoint in favour of them being located in France. If you understand the principles of RBL weighting then you will get the idea. --Michael Dillon