My iPhone Is Tracking My Every Movement
...and sending it back to Apple so that Steve Jobs can inject code into my brain to make me buy more Apple products even though I don't want to.
Or at least that's what you might hear on the evening news tonight.
The truth is far less interesting. Yes, the iPhone has some basic tracking data that it stores on where it's been. It's not GPS data that it stores, it's a rough location as best as it can tell by using triangulation from nearby cell towers. It can be miles off - or fairly accurate. Also, no one can get access to this information unless they can physically use your iPhone and/or computer that you sync your iPhone with. If they've got your computer and they're "bad people," you've got other issues on your hand than them knowing that you were at Subway last night.
And most importantly, it's a non-issue if you've checked this little box in iTunes under the iPhone preference pane:
I tried using the example software to grab the location data and it couldn't see it because it's encrypted.
It still is a freaky thing to hear and hopefully Apple sorts this out in a future software update. But I'd put a Grande Peppermint Mocha on Google/Android and other smartphone makers doing something very similar with their devices.