Just (finally) upgraded 5.0.6 -> 5.0.9, and one of my users is trying to schedule something in the conference room. She said that she typed in the name of the location ('Board Room') and obviously expected it to be scheduled. I looked, and noticed that when she was typing in the room name, the QuickAdd dialog box wasn't trying to do a GAL lookup to find the location, and simply saved the name as text. I could've sworn that adding a location like this worked in the past.

The Location field in the advanced window seems to work properly.

This bug seems to mostly describe the issue: Bug 31094 – QuickAdd Appointment dialog and scheduling Resources