I thought I have read somewhere that the accuracy of Android's GPS is about 10cm?
Can anyone verify or correct this? Reason being is that my application I am trying to develop keeps track of locations an user has visited and it would help me out tremendously to know the margin of error I can expect?
10 centimeters? No chance. In any event, Android is just a device OS; the actual accuracy of a GPS device is dependent on the device's chipset. Android may be theoretically capable of accomodating devices with that level of accuracy, but that's it.
The accuracy of GPS devices is normally not presented as a simple distance, anyway. Usually, a device's accuracy is given as a distance along with the percentage of measurements that are within that distance from the true location. A typical accuracy for a hand-held GPS device would be something like 30% of your measurements within 50 meters of the true position (yes, the devices are typically that inaccurate).
10CM accuracy is pretty unlikely. Military MGRS systems using the military GPS system, for example, which tend to be a bit better than civilian equivalents, have a 1m resolution. Assisted GPS may provide tighter resolution if available, but right now it takes a device significantly larger than a cell phone to achieve a 10cm resolution. The GPS resolution depends more on the hardware than the software.
Depends on the actual GPS hardware but it is reasonable to expect about 10m horizontal accuracy now that SA is turned off (it was 100m when SA was on). Vertical accuracy is usually about 3 times worse than horizontal.
If the GPS hardware can receive WAAS correction it can do better, about 7.6m worst case, 1-2m best case. Most phones don't have WAAS though (do any?).
There is a table of expected accuracy for various kinds of devices in the WAAS entry of Wikipedia.
The hardware is not that accurate. I doubt even military location systems are that accurate, but I do think the structure of the GPS coordinate allows for that kind of accuracy...