In my experience, it's pretty accurate on the country level, world-wide. In the US, it's pretty accurate up to the city and inferred area code level. I have no experience with city-level outside the US.
The only exception are large companies that channel internet traffic through a VPN: often, it looks as if remote employees access the internet from headquarters or a datacenter location (which is maybe what you want if you use if for assigning sales territories)
Hope that helps,
Jep