Engadget have posted a movie of the new iPhones GPS in use. Embedded below it perhaps confirms the conceans of the small antenna and reduced accuracy/update times:
There have been rumors abound of why various companies were restricted from producing a turn by turn GPS application for the iPhone, the reason could be that the unit simply cant keep up with realtime locations?
If the iPhone is only capable of simpler location based services that would be big disappointment, looking at the applications now available in the iTunes stores the signs do not look good.
We would test it out ourselves but O2 in the UK has made such a botch of upgrading that it could be few weeks before we are able to get hold of a handset.