Well, lets start with this:
3. Why is my iPhone logging my location?
The iPhone is not logging your location. Rather, it's maintaining a database of Wi-Fi hotspots and cell towers around your current location, some of which may be located more than one hundred miles away from your iPhone, to help your iPhone rapidly and accurately calculate its location when requested.
That is a lie. The end.
I have examined the data and referenced it to the tower placement in my area, which seeing as how I know 100% where every tower that is remotely possible for my phone to hear is located at, I can say for sure the phone IS WITH NO QUESTION TRACKING ITS LOCATION! Hell any one can see this, clear the phone, login to a new user with windows, start iTunes activate the phone. New log file. Then go for a drive. Tell me if its not recording the location.
Next:
When I turn off Location Services, why does my iPhone sometimes continue updating its Wi-Fi and cell tower data from Apple's crowd-sourced database?
It shouldn't. This is a bug, which we plan to fix shortly (see Software Update section below).
Thats a little too convenient isnt it?
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Our iAds advertising system can use location as a factor in targeting ads. Location is not shared with any third party or ad unless the user explicitly approves giving the current location to the current ad (for example, to request the ad locate the Target store nearest them).
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THAT IS THE MEAT OF WHAT THIS DOES.
Bottom line, its all about the money. Now, they may have some plan of a traffic system in the future, but you can bet your arse on the fact they are getting paid NOW for as much information as they can provide about trends. And if you can tell people statistics even when it is anonymous about purchasing, travel, etc, its quite valuable information.
Its all about marketing, and advertising.
Fact is, unless you are a criminal who stands to loose something from having his phone track where you've been, who really cares.
BUT, does the mind not revolt at the idea that the whole *&#Y$ world is ran by *&^*% advertising?
How low will people sink now to get that..
When are people going to get tired of being advertised to? I say we start boycotting the damn products we see on our phones..Knowing we are all unwilling participants in their damned marketing improvement scheme...
Bah...