Yes, it's true. Unless you're carrying around some museum piece, your mobile phone has a tiny GPS in it. Even if you have a cheapo crappy one, it still has one in it as near the end of 2005, all cell phone carriers were required to provide the ability to trace cell phone calls to a location within 100 meters or less.
This morning I had my phone stolen while I sat in a bagel shop sipping expensive coffee. I figured I would call my carrier and ask them to assist. I could at least find out who might be calling what numbers and, at best, where the phone is.
They could do neither. They said the last call my phone had made was 15 hours earlier. (I had made a call an an hour before it went missing.)
According to the tech support group, the on-board GPS serves two purposes.
1. Finding you in 911 situations
2. GPS enabled applications
If you call 911, the call includes GPS location data so maybe they can find you. The GPS application... that's the on-screen mapping software to help you find your way when you're in unfamiliar terrain. If you have an iPhone, I'm sure you know what I'm referring to.
Anyway, don't bother calling your carrier when you're phone is stolen unless you can get the thief to dial 911, even then, you're still out of the loop.
There is one other option: Location Based Services (LBS)
These are companies that produce phone-based applications that run on certain phones. You download the application into your phone, create an account on their site, and you can watch your phone move down the street as a red dot.
A few of them:
Some of these work even if the phone is powered off. Be aware, it's not nice/somtimes illegal to do this to people without their consent. (Of course, kids that have phones you're providing... I think you could get away with that one, at least legally.)
Bottom line, don't turn your back next time you're having a bagel or maybe even easier, keep your phone in your pocket.