There are various reports of it just being cell based positioning, rather than GPS.

Im after definate proof that it has GPS, every single bit of information on the net doesnt link back to a concreate source, its all guessing. Apples blurb on the site can be determined either way.

So if anyone has a solid link, or even better, has an iphone 3G they can check out, post here!

Seems like a pretty clear statement on this page by Apple:

http://www.apple.com/iphone/features/gps.html

Yeah, looks like it. Oddly, I went to that part of the site and didnt see that page, looked at the maps demo instead.

Reminds me of the reason I dislike apple, to read the blurb on that page it makes them look like they are the first with AGPS.