Searching classifieds by location

Hi! A quick question:

I'd like to build a classifieds marketplace into my site, and allow users to filter classifieds based on their location and the location of the item listed for sale. Ebay do a similar thing with their proximity search where you can enter your own postcode and then search for listings 10, 50, 100 miles away. Is this possible?

Thanks WPMU: As a new (returning) member I've spent today with a huge smile on my face, downloading and trying out your plugins!

Best, Tom