The honeypot idea. Like it was said before it won't help you find out where they are attacking from. Also there can be some legal issues with setting one up to trap someone. It is much the same as entrapment by law enforcement. I will say I like honeypots but there has been a lot of legal controversy over this.
Honeypots are nothing like entrapment. Entrapment would be if a law enforcement officer was telling you to hack the system. Sine a honeypot is a private endeavor and is a passive system... clearly this does not apply.

People need to seriously stop giving legal advice when they haven't got a clue.

cheers,

catch