Choosing Germany is a wise choice: Germany (including Switzerland and Austria of course) has by far the most active Wikipedian community: even if you compare it to the much larger english Wikipedia, the ratio of pages per native speaker exceeds every other edition of the free encyclopedia by a huge margin. This is not surprising as text and words have always played a special role in Germany (think Gutenberg, think Goethe and all the other word freaks that have hung around here ;).
I must admit I have hoped for Berlin being chosen over Frankfurt as it offers much more in terms of culture and entertainment. But I must also admit Frankfurt might be much more attractive than Berlin in terms of travel. Also, Frankfurt is the host of the annual international book fair so there is a natural fit as well. I expect the Wikipedia craze to skyrocket next year and I think much more people are about to attend than the organizers might think today.
I hope the community will decide to shift the date to October as it would coincide with the book fair, but right now sometime in August seems to be the way to go. Hope it won‘t interfere with HEX 2005.