No, the iPhone doesn't have a GPS receiver, but I always suspected that adding GPS-like functionality to the iPhone wouldn't be too difficult for two factors.

First, there are projects that have assembled "wardriving" databases (these guys, for example). This process involves driving around various neighborhoods with a laptop, a GPS device, and a WiFi detector. Every time they encounter a WiFi network, they triangulate its location, and give that WiFi network GPS coordinates.

This database can reliably tell you where you are, just by virtue of seeing what WiFi networks are in your vicinity.

Second, you may have heard of E911 services, or Enhanced 911. The idea here is that when you dial 911 on your phone, your address information is sent to the dispatcher so they can tell police/fire where you are if you are unable to do that yourself.

This worked perfectly for land lines, but the feds required the cell providers to add E911 support at the cell towers, which means those towers closest to you also have geodata attached to them, and this information is accessible to phones from some towers.

At Gavin's wedding reception, I mentioned to Keith that this would be a neat idea for someone to put together.

And it turns out someone already did. They're called Navizon, and they integrate nicely with Google Maps. If Navizon figures out where you are, it plots that location in the Google Maps app, and at various red lights on my drive home this evening, I put it to the test, and while it didn't work everywhere, it worked frequently enough to be another useful tool on my iPhone.