I don't have an account but an IP address is a series of numbers that tells websites where the computer you're using is located. Most if not all websites can read your IP address, but few actually ask permission or notify you about it. Even this website I'm sure can see your IP address, though it may not display it. Whether or not it asks permission does not necessarily make it safe or unsafe. Also, IP addresses don't necessarily give your exact location. For some people it does, but I've heard some people say that the IP address website lists their location as nowhere near where they actually live (I think this may be because some web browsers have some sort of safety feature). My IP address places me in the correct city but about 20 minutes from where I actually live.
As long as the website is run by reliable persons then it shouldn't be a problem. Of course, you can always try contacting the people who run the site and asking about it if you don't feel comfortable about them knowing your location. Many websites probably use IP addresses just for deciding which ads to display.
You can check your IP address here.
http://www.ip-adress.com/
Also, here's some more info.
http://en.wikipedia.org/wiki/IP_address
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