GPS taken as a standalone entity can work without pulling any data from the cellular network -- it is effectively a free commodity for anybody with a GPS satellite receiver. (With A-GPS you'd get a faster result, as well as the possibility to obtain results indoors or in areas with otherwise obscured lines of sight. A-GPS does require a data connection with the cellular network. But the iPhone 3G's A-GPS can fall back to regular GPS in the absence of such assistance.)
However, with data turned off, you will be unable to download any maps.
As a consequence, you will be able to obtain your accurate latitude and longitude, however your location will be plotted on a blank screen.