The Google Maps app works very well, make no mistake, but the “locate me” feature, which is part of firmware 1.1.4, has mixed results. For me, when I am in my hometown, it is accurate to about 1 city block. In a large city like Denver, it is accurate to a few feet. I went for a drive in the country this weekend, and the “locate me” button drew a circle on my map about 1 mile wide.
If you have accuracy issues with the “Locate Me” feature, then there is something you can do about it. Skyhook Wireless, the developers of the technology which allows for the cell tower / wireless access point triangulation to work has a service that will allow you to help the service be more accurate.
Follow this link, and enter your wireless access point information. As this database grows, then the accuracy of “locate me” will improve. If you would like Apple’s 2 cents on the matter, here is a Knowledge Base article on improving “locate me” accuracy. If enough people jump on this bandwagon and register their access points, it will help everyone so go out there and register!