Originally Posted by Romer
The 3G units have a built in GPS chip that works whether the 3G is on or not. The wifi does not. At least thats what I read
This is correct, the 3G version has GPS and the WiFi version does not. The GPS functionality is part of the cell modem and obviously Apple decided that it was not worth designing a non-cell version with a standalone GPS chipset. The reason someone would presumable get a non-3G is price and every penny spent on NRE and components dinks profit.