The gis extension is now compatible with both MediaWiki version 1.4 and version 1.5. I spent some time testing with 1.4 this weekend, and saw no issues.
I have updated the documentation at meta:Gis
To recap, one can enable support for the geo tag, for the list of map sources and for the neighborhood article list in steps. Only the neighborhood list requires enabling of the database.
For the database mode, I looked at the MySQL spatial index support, but that requires version 4.1. So I've stuck with the vanilla type so far. Enabling the database will of course also enable support for articles being represented in the Wikimaps, but although the database is in place, the maps and map engine still requires a good deal of work.
Egil