I just figured out how to do this. You will need a USB GPS Receiver. I also got a program called "Earth-Bridge" which allows generic USB GPS units to send their data in realtime to Google Earth.
Just install Earth Bridge, and then Install your Drivers for the USB receiver, and then plug in your Receiver and start Earth Bridge. The GPS will take about 45-60 seconds the first time to get a lock on your position but after that it is pretty good at staying up to date.
Since the GPS uses an internal serial to USB you have to deal with a virtual com port, just make sure you check your instructions on the USB and configure it correctly in Earth Bridge to use the right com Port, baud rate, etc...
Sometimes, the GPS shows me out in the ocean (or somewhere completely different from where I am) and I wait about a minute for it to lock on but it won't get a lock. Then there is a button on Earth Bridge "Reload in Google Earth" and it will usually fix it right away.
A good GPS receiver (the one I bought and love) is here on Amazon for about 38USD.