About the “well known bug”, as Matt says, concerning Visitors Countries Report (non-GeoIP) and the map, I’ve noticed a big progress with Piwik 1.7 up to this day! I received a visit from Constantine-Algeria (GeoIP) and in Non-GeoIP this visit is marked as Unknown-France. Always a little problem there.
GeoIP works correctly, the problem comes from non-GeoIp reports and world map, I’ve tested with IP adresses and this tool
Good news: GeoIP is now integrated in Piwik, enabling Accurate Visitors Geolocation in your Analytics reports. To enable GeoIP go to the Settings > Geolocation admin page, and follow the short instructions.