I have a 3g and have had this problem since I upgraded to 3.0. This issue is a lot more common than you would think and my theory ( and that of others I have found online with this problem) is that we need to wait for a software update from apple. It can't be hardware if so many of us are having the problem and if it started with the 3.0 update on a 3g. Also, does your gps manage to lock on or not? My 3g location is not accurate, and my wifi is more accurate, but the actual gps in the unit never locks on and the blue dot never starts flashing and emitting waves.