I disagree.
Latitude and longitude are absolute, lend themselves to easy super-imposition upon a map (coordinate conversion is trivial), and degree of accuracy is controlled by the user. If you want to be a little hazy about where you are, don't provide the significant digits.
For the record, I have a fair amount of experience with this, dealing with moving map displays and GPS based tracking systems under
APRS. Attempting to implement a system such as you're describing makes it quite a nuisance, and is too U.S.-centric.
Not to mention, my ZipCode is 2 years old, and *still* isn't in half the ZipCode-to-whatever converters. Nextel tried to tell me I don't exist, based on my ZipCode. I had to use a nearby one so they could process my order.
--Chris
e-mail jcwren