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agkm800

macrumors 6502a
Original poster
iPod Touch can determine my current location without GPS. So, I thought it does it via wi-fi; perhaps, by recognizing my IP address or something? I don't know.

Nevertheless, what I don't understand is that it cannot determine my current location when I go down to the basement where our wireless router is actually located, thus where the wi-fi signal is the strongest in our entire house.
 
It doesn't use your own router's Wi-Fi signal. It uses predetermined Wi-Fi networks in your area.

Here's how Apple explains it:
The iPod touch ... provides your approximate location using information based on your proximity to known Wi-Fi networks. ... Known Wi-Fi networks are predominantly in urban areas.​
See Skyhook Wireless for more technical details.
 
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