Actually, it first uses cell triangulation to grab a general area, then attempts to whittle it down if WiFi is available, THEN uses that general location to lock onto satellites for a more exact fix. Sometimes people never get past the first couple of stages, and they're left with a big 'location circle' on their map.
This happens to me almost always since 3.0. It NEVER gets my GPS location anymore. I can't watch the blue dot move as I drive. It's really dumb now. It used to at least semi-work.