To my knowledge this feature isn't working in the PHP version (at least not mine). Although it only searches the registration IP's, and not the post IP's (I remember back to my PERL versions). We've had some very unwanted visitors on the board I run, and it would be nice to exterminate them quickly with their dial-ups by finding certain ranges and so forth.
I would just consider this a very strong feature I hope Scream adds in the next version, as I feel it could be immenseley valuable to those of us who run a more controlled board.