I think Apple will know where you are located.
When I used the option to chat with an Apple Genius on the Apple website, I decided to tell the lady that I have the new iPhone 4 just like the one Gizmodo had. I told her I was in Italy and I didn't know what to do. She then told me,
"No you are not, you are in *
name of city*, *
state* *
name of high school* and we will be notifying the school officials"
I then freaked out and logged off my account, but nothing happened.
So in conclusion, I think Apple knows where you are all the time and they can do whatever they want with that info.
So don't do anything stupid on FaceTime
*This is happened before the iPhone 4 was officially announced, like 2 months before*