yes, iplocation is available in all versions of Splunk. as noted above, it requires that your Splunk instance have access to the internet, as it uses the http://hostip.info service to provide the location information. i've edited the relevant topic to clarify this.
Yes, I've tried to use it per the documented example and it just hangs. I figured out after digging around that it requires a connection to the Internet -- which should probably be documented.