For what is it worth, I also struggled with this bug following a fresh install 
of Ubuntu 8.04.2 following
the same steps as the OP (i.e. new user account.)  I did finally resolve it by 
clicking on the time/date
area of the upper panel, then the edit location and then set followed by 
entering my password
on an authentication prompt and it was then fixed.

However, this is flakey behavior by the OS with which average users would 
struggle.  I wanted to post
as I found the bug report via performing a search after experiencing the same 
issue as the OP and thought
it was important to note that he is not the only one who experienced it.

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Clock applet does not display weather until weather applet added
https://bugs.launchpad.net/bugs/279994
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