//To use:
 
$content['country'] = array('#type' => 'select',
                                                      '#title' => 'Country',
                                                      '#options' => get_country_option());
 
//source: http://www.internetworldstats.com/list2.htm
 
function get_country_option() { 
  $countries = "Afghanistan
    Africa
    Albania
    Algeria
    American Samoa
    Andorra
    Angola
    Anguilla
    Antarctica
    Antigua & Barbuda
    Antilles, Netherlands
    Arabia, Saudi
    Argentina
    Armenia
    Aruba
    Asia
    Australia
    Austria
    Azerbaijan
    Bahamas, The
    Bahrain
    Bangladesh
    Barbados
    Belarus
    Belgium
    Belize
    Benin
    Bermuda
    Bhutan
    Bolivia
    Bosnia and Herzegovina
    Botswana
    Bouvet Island
    Brazil
    British Indian Ocean T.
    British Virgin Islands
    Brunei Darussalam
    Bulgaria
    Burkina Faso
    Burundi
    Cambodia
    Cameroon
    Canada
    Cape Verde
    Caribbean, the
    Cayman Islands
    Central African Republic
    Central America
    Chad
    Chile
    China
    Christmas Island
    Cocos (Keeling) Islands
    Colombia
    Comoros
    Congo
    Congo, Dem. Rep. of the
    Cook Islands
    Costa Rica
    Cote D'Ivoire
    Croatia
    Cuba
    Cyprus
    Czech Republic
    Denmark
    Djibouti
    Dominica
    Dominican Republic
    East Timor (Timor-Leste)
    Ecuador
    Egypt
    El Salvador
    Equatorial Guinea
    Eritrea
    Estonia
    Ethiopia
    Europe
    European Union
    Falkland Islands (Malvinas)
    Faroe Islands
    Fiji
    Finland
    France
    French Guiana
    French Polynesia
    French Southern Terr.
    Gabon
    Gambia, the
    Georgia
    Germany
    Ghana
    Gibraltar
    Greece
    Greenland
    Grenada
    Guadeloupe
    Guam
    Guatemala
    Guernsey and Alderney
    Guiana, French
    Guinea
    Guinea-Bissau
    Guinea, Equatorial
    Guyana
    Haiti
    Heard & McDonald Is.(AU)
    Holy See (Vatican)
    Honduras
    Hong Kong, (China)
    Hungary
    Iceland
    India
    Indonesia
    Iran, Islamic Republic of
    Iraq
    Ireland
    Israel
    Italy
    Ivory Coast (Cote d'Ivoire)
    Jamaica
    Japan
    Jersey
    Jordan
    Kazakhstan
    Kenya
    Kiribati
    Korea Dem. People's Rep.
    Korea, (South) Republic of
    Kosovo
    Kuwait
    Kyrgyzstan
    Lao People's Democ. Rep.
    Latvia
    Lebanon
    Lesotho
    Liberia
    Libyan Arab Jamahiriya
    Liechtenstein
    Lithuania
    Luxembourg
    Macao, (China)
    Macedonia, TFYR
    Madagascar
    Malawi
    Malaysia
    Maldives
    Mali
    Malta
    Man, Isle of
    Marshall Islands
    Martinique (FR)
    Mauritania
    Mauritius
    Mayotte (FR)
    Mexico
    Micronesia, Fed. States of
    Middle East
    Moldova, Republic of
    Monaco
    Mongolia
    Montenegro
    Montserrat
    Morocco
    Mozambique
    Myanmar (ex-Burma)
    Namibia
    Nauru
    Nepal
    Netherlands
    Netherlands Antilles
    New Caledonia
    New Zealand
    Nicaragua
    Niger
    Nigeria
    Niue
    Norfolk Island
    North America
    Northern Mariana Islands
    Norway
    Oceania
    Oman
    Pakistan
    Palau
    Palestinian Territory
    Panama
    Papua New Guinea
    Paraguay
    Peru
    Philippines
    Pitcairn Island
    Poland
    Portugal
    Puerto Rico
    Qatar
    Reunion (FR)
    Romania
    Russia (Russian Fed.)
    Rwanda
    Sahara, Western
    Saint Barthelemy (FR)
    Saint Helena (UK)
    Saint Kitts and Nevis
    Saint Lucia
    Saint Martin (FR)
    S Pierre & Miquelon (FR)
    S Vincent & Grenadines
    Samoa
    San Marino
    Sao Tome and Principe
    Saudi Arabia
    Senegal
    Serbia
    Seychelles
    Sierra Leone
    Singapore
    Slovakia
    Slovenia
    Solomon Islands
    Somalia
    South Africa
    South America
    S.George & S.Sandwich
    Spain
    Sri Lanka (ex-Ceilan)
    Sudan
    Suriname
    Svalbard & Jan Mayen Is.
    Swaziland	
    Sweden
    Switzerland
    Syrian Arab Republic
    Taiwan
    Tajikistan
    Tanzania, United Rep. of
    Thailand
    Timor-Leste (East Timor)
    Togo
    Tokelau
    Tonga
    Trinidad & Tobago
    Tunisia
    Turkey
    Turkmenistan
    Turks and Caicos Islands
    Tuvalu
    Uganda
    Ukraine
    United Arab Emirates
    United Kingdom
    United States
    US Minor Outlying Isl.
    Uruguay
    Uzbekistan
    Vanuatu
    Vatican (Holy See)
    Venezuela
    Viet Nam
    Virgin Islands, British
    Virgin Islands, U.S.
    Wallis and Futuna
    Western Sahara
    Yemen
    Zambia
    Zimbabwe";
  $pattern = '/\\n/';
  $countries_arr = preg_split($pattern, $countries);
 
  //Now format the array
  foreach ($countries_arr as $country) {
    $new_arr[trim($country)] = trim($country);
  }
  unset($countries_arr);
  return $new_arr;
}