Unless you're particularly interested in the innner workings of the Internet, you probably won't be aware how the IP address system works. To cut a long story short, there are only a finite amount of numbers in use and these are allocated in a per country (and per organisation) basis, so if you know a particular IP address you can be fairly sure where the user's computer is located.
One of the smallest countries to be allocated a range of IP addresses in the Vatican. The ever curious team over at Torrent Freak just looked at addresses for downloads coming from the Holy See and Holy Shit, guess what the Holy Saw - porn and pirate movies!!
http://torrentfreak.com/priests-watch-dvd-screeners-while-pirates-download-filth-in-the-vatican-130407/