It's not really hard.. one choice with a multitude of options:

  Choose Level of Location Access:
  1. Full access (exact location)
  2. Nearest [major intersection, city, state]
  3. Fixed location [home, work, present location, choose from map]
  4. Random walk [choose area from map]
  5. Ask me every time
  6. Deny

Go ahead and default/emphasize the most-desired and least-confusing options so that fewer mistakes are made. But treating users like children and restricting their options in the name of 'usability' is downright wrong. Your average person seems quite dumb due to disinterest, but give them options and abilities they didn't know they could have, and watch as their interest perks up.