I've been quite happy wit hteh geolite city database: http://www.maxmind.com/app/geolitecity

updating monthly is a bit of a pain, but no real complaints. i'd recommend using mod_geoip since it's written in c

also I use the binary format of the database as recommended by maxmind, but one cool thing i was able to do with the the csv version was import it into my db and then use sphinx to build a full text searchable index of worldwide cities