All models of iPhone since the 3G, as well as the iPad 3G and iPad 2 3G, include Assisted GPS (AGPS).
I’ve heard that this isn’t real GPS or that it’s somehow inferior to real GPS. AGPS is actually superior to “real” GPS. However, there are ways the iPhone is also inferior to a standalone navigational GPS like a Garmin or Tom Tom. I’m going to explain the differences between them.