Thanks gruesom - that's some useful feedback. I've removed the 'alert' about the redirect, per your suggestion (still have a message on screen though).
Firefox does this cool wifi scanning thing to get the most accurate location. It's really accurate (and I cache it, so I only have to do it once), but I don't think there's any way around taking a few seconds to determine your location.
Good point about the psychology. I was worried that playing up the competitive aspect could annoy users ("You want me to compete for your benefit?!") and was trying to walk a bit of a fine line ... I think I'll be a bit more comfortable with that approach after we get some regular users and see how they use the site.