Geo-targeting Content Based On IP address?

[MichaelWeisbaum]

What are the benefits / disadvantages of geo-targeting content based on IP address.  A client is interested in serving up different content on their homepage based on what area the user is coming from.  This seems like an SEO nightmare to me as search engine spiders could potentially see different content depending on when they visit.  Is there a best practices here? Or is it looked down upon in regards to SEO?  Any information would be helpful.

[BrianCrouch]

Check out this discussion first: http://www.seomoz.org/q/geo-targeting-by-ip-address

There's nothing wrong with dynamic targeting, if it's done right: http://www.seomoz.org/blog/keyword-level-demographics <-- That post is about persona-targeting

Be aware that for many sites' geo-targeted content is not on the homepage per se, but a landing page built for that purpose. That doesn't mean it's the only way to go, but that's where you'll find more examples. It's probably best to do some multivariate testing before going all in on it... 
If client's doing this to improve user experience, there's nothing wrong with it, but yes it could have unexpected effects on your results in local search.