I have been wondering how the iPhone determines location based on wifi, because I want to integrate this functionality into a java app of mine.
When I run a location check on my ip, it throws me all the way into some other neighborhood... But when I use my iPhone's location feature, it points right too me. (and GPS is turned off)
How does the iPhone determine location? Because I know it's not using an ip location.
It uses a wifi access point database. See: http://skyhookwireless.com/ and specifically http://www.skyhookwireless.com/press/skyhookapple.php.
It's using a triangulation scheme based off of known wifi access points. When this was first announced, I heard the name Skyhook Wireless thrown around, so it's possible that the iPhone is using their databases for location.
Cell tower triangulation? It can see the neighbouring GSM antennas and knows the relative signal strengths. This allows a pretty good estimate