Developed in 1970s, the GPS system consists of (as of 2012) 32 satellites around the earth in such a way, that at least 6 of them are visible from any point of earth at any time. This allows GPS receives to receive GPS data from the satellites and transmit them (using NMEA-0183 format) to military level, and recently, consumer level devices.
All the GPS receiver does is to convert the received signal to Geographic Coordinates (Longitude, Latitude and Altitute) and transmit it to a device designed for user interaction. GPS has many uses, including navigation in both streets and air, and location finding for other (both good and bad) reasons, like statistics collection, device or object finding, image location etc.
Some devices, especially smartphones, get some data about GPS satellites from mobile network or internet. This can improve the time needed to get first fix and improve accuracy. This is called A-GPS (Assisted GPS).
Wi-Fi- and GSM-navigation is a method of computing the current location without getting signal from the satellites, but rather getting information from WiFi or GSM networks.
Accuracy of this can vary (and it's usually very inaccurate, some times over 300m) but it is generally used to locate an area, rather to locate a street. However it consumes less battery, and you might still be able to locate an image in the map using specialized EXIF software.
There is a lot of navigation software available for smartphones that uses the GPS.
Map software which help you to navigate through streets. Most maps are available at a price, but they can save you the day if you get lost in a hard-to-navigate city.
Off road software that help you record and playback paths, save waypoints, play geocaching etc.
EXIF software that saves GPS information to images or videos you take, allowing you to place them on a map later on. All smartphones that have GPS and camera can save EXIF information on an image when the GPS or the A-GPS is enabled.
All software takes NMEA-0183 data from the embedded GPS receiver and transforms it to information presented to the user. Some applications also present you the actual coordinates (in the -180,180 -90,90 system or in other formats, like DRG or UTM grids).
GPS can be both friendly and dangerous, so keep in mind the following:
A lot of car accidents have happened because the driver watched the GPS instead of the road. Be extremely careful while driving. Turn on voice-directions instead of onscreen-directions.
Maps can be outdated or rendered invalid, recently a man was killed in Australia because a map error led him to a jungle instead of its destination. Always check the validity of your maps. Maps tend to be better in developed areas. For example, in Europe most maps are adequately complete, whereas in obscure, hard to access areas like Somalia the maps you may have can be completely invalid.
GPS may not be accurate, depending on your location. For example, when very close to the north pole, the Longitude information is very unstable and should not be considered. In congested areas, sky might not be clearly visible and GPS reception might be poor. Some areas artificially block GPS signal via scramblers. Assume that GPS information is OK but never rely entirely to it. If you must rely on GPS, verify its accuracy beforehand.
Some countries prohibit the use of GPS. For example Egypt used to ban GPS usage until 2009. Always check with your destination, particularly in obscure locations (say, North Korea).
Do not rely on only one GPS application, especially when off-road activities are involved. Test more than one beforehand.
GPS receivers rarely provide accurate altitude information. While this depends on the device used, Longitude and Latitude are way more accurate than Altitude.
Never rely on GPS when accuracy is critical. If you, for example, fly a plane, relying on a consumer level smartphone GPS device to land will usually be fatal. Aircrafts have their own GPS receivers, and if they don't, use your eyes.
Smartphones tend to have EXIF information on by default. Remember to switch it off.
GPS drains the battery a lot more. If your power is limited, turn it off to save the battery for more shots.
Even if GPS devices do not transmit (they are only receiving), avoid turning the GPS on within an aircraft. While you cannot possibly interfere with the aviation system, you might be accused of doing so. For more, see Aviation security.
If you are foolish enough to take a picture of something that is not allowed such as a military installation in a country like Iraq, make sure that EXIF is at least off. If you are captured and EXIF information is also found in your image, you are in real trouble.
Remember that GPS is PROOF of where you have been. If someone takes legal action against you, they can and will use the EXIF information found in your images to substantiate their charges.
This is a usable article. It touches on all the major areas of the topic. An adventurous person could use this article, but please plunge forward and help it grow!