Apparently the Wi-Fi-only version of the iPad 2 is able to suck out the iPhone's GPS capabilities when the two devices are tethered. One downside to getting a Wi-Fi version of the iPad 2 instead of the 3G version is that in addition to having no mobile data access, it doesn't have a GPS chip. That makes all of the device's settings and apps that use real-time locations to do it based on very rough Wi-Fi data instead of street-level accuracy.
But reports are beginning to surface that the iPad 2 Wi-Fi has a feature that Apple hasn't advertised. When you use an iPhone as a mobile Wi-Fi hotspot for your iPad 2, it lets the iPad 2 also tap into the iPhone's GPS capabilities.
The iPhone's Wi-Fi tethering was not a standard feature when the first iPad 2 was released, so this is clearly something Apple added to the back end. It's odd that the company isn't toting it as a new feature.
Then again, it isn't a huge deal. But if the lack of GPS functionality is why you're on the fence over whether to buy a 3G iPad 2 or a Wi-Fi iPad 2, and you already have an iPhone, then this might just be the deciding factor.