iPhones have a built in GPS chip, it locks signals from satellites over head and then triangulate and pinpoints your location onto the map, thus the need for you to be outdoors and in open area to get GPS signal lock (this applies to all PND too)... thus you can off data and still use the GPS software...

For quicker startup and signal lock, iPhone (and other phone based GPS) uses A-GPS (Assisted GPS) system, where it uses telco data from their signal towers to "lock" your location while the GPS chip tried to get signals from the satellite (this does take some time if its cloudy or raining).... so if iPhone is trying triangulate location from telco signal tower, it consumes about 10kb or so, and this part uses Data connection, and yes, you need to pay for that incoming data...

So, technically, you can use GPS without data, but the signal lock will be faster when u on it due to the A-GPS system in the iPhone, especially when you are driving and satellite signals may be lost...

Jasonjinct: And while Papago dont use A-GPS, iPhone does...