Just got clear up some confusion here.

To simply put it, GPS on most phones allow them to receive GPS signals from the sky and then calculate your position on the map. However, the process of doing this is slow and requires a lot computing power. Some even say its slow due to the limited computing power of the phone.

So enter AGPS. Its essentially the same GPS but now with software assistance. What kind of assistance? It now uses your phone's data capabilities to connect to a 'GPS server' to download coordinates and other essential parameters and effectively reduce the time it takes to lock on a position. That is because the 'GPS server' obviously have more computing power and resources. So let the hard work be done off the phone.

Put into case, the Nexus One has GPS and it also uses your data to get a position fix.