the gps in Iphone actually is not a truly GPS that rely 100% latitude/longitude data from satellite. It is a Assisted-GPS (A-GPS) which rely on 3 NodeB/transmitters of telco and processor will try to calculate your exact location. (most of the mobile can only listen to 3 transmitters at a time, or Rake Fingers)

I am not sure wether chip set in Iphone can breakfree from these A-gps and just received data directly from satellite. So we dont have to rely on 3G connection in order for us to get our location reading.

just my 2 cents.