Here's a shot taken further along the canyon.

The pod race itself sounds like it's going to be chock full of special effects, so I wouldn't doubt that a lot of what actually goes up on screen is actually cooked up by the wizards at ILM, and not anything that went on in Tunisia.

The story goes that some Tusken Raders shoot down a pod racer through this valley. This pod crash image was captured in a German magazine.

Still, it's a gorgeous location, so it'll probably at least serve as an attractive background to what's supposed to be a pivotal sequence. One of the prequel web sites went as far as to claim it'll be like Yakima Canutt's famous chariot race sequence from Ben Hur.

Ignore the notorious bounty hunter superimposed on right side of this pod crash photo by the magazine editors. He's not appearing until Episode II.