There was an exception in saving continents, but this has been fixed.
We're using the awesome Yahoo! location service right now - here's an example Europe query:
http://query.yahooapis.com/v1/public/yql?q=select%20*%20from%20geo.places%20where%20text%3D%22Europe%22&format=xml
This will give us a nice bounding box to help determine searches on your specified continents, regions, etc - whatever Yahoo! supports.
We'll be adding more features around locations ASAP - we just needed lots of live data to help us out :)