Setting Geographic Boundaries on the Internet

Hi;
A company called RealMapping is offering a very expensive service to map IP
addresses to physical locations. Now, anyone can easily parse an HTTP
header and grab an IP address. I know there's a way to find out the
physical address for the location of that IP address (what is it?). Are
there so many IP addresses that it becomes very costly to create a database
of them and update it regularly?
TIA,
BenO

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