Oooh, now that's the way to get real names + addresses out of people. Neat. It also involves social pressure -- now not giving away your address will mean rejecting a gift.
For geographic targeting IPs and user-entered information are usually good enough. Also, as gsharma mentions, facebook has tons of geographic information on users from mobile, which is better because it reflects where you actually spend your time and doesn't go stale.
I doubt facebook will extract much value from physical addresses. Rather, I think this is purely part of their monetization strategy. They can double the average user's contribution to their revenue from a single five dollar purchase. Also, I'm wondering if this is facebook's attempt at building a payments platform. I think this industry will be worth tons of money in the short and long term future.
I swear, I really was born on 1/1/1970. I'm a epoch baby! Ok, maybe not.