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Zip code lookup for State, City

I was looking for a way to populate a Contact's city and state based on a zip code. Basically, when I enter a zip code and save the record, I would like the state and city fields to be updated with the appropriate information. I am not sure if it would be easiest to use a web service, API, or trigger. I would rather not build this "table" myself since it would be a bear to maintain. I thought there would be some sort of web service that you could use in conjunction with a formula "state" field that would take the zip, look up the state, and populate that state formula field.
Has anyone else done this?
Thanks, Jeff
I don't know that there are any AppExchange partners for this, but the US Postal Service does expose an Address API that allows you to resolve zip codes to city and state.

I realize that this is quite an old post, but I have to do this EXACT thing.  I'm pretty good with Apex, but new to web services.  Can anyone point me to resources (tutorial?) that could help with this?