It would be possible to show people by their location, probably by one of the google map mashups that offer such a service, or by putting together a uk map and letting people narrow by counties, cities etc. It'd have to be opt in for privacy reasons.
I'll see what Dan thinks. If yes, it's gonna be a while before anything could be implemented.
You can search for people by location using
member search, though it does need a pretty exact location so I doubt many will find it that useful.
As for the attachments, an oversight. They're now set to 195k each. There are also dimension restrictions. I don't really know what would be the most ideal sizes so feel free to suggest.