I wonder how long it will take for someone to use the MobileMe finder service for bad things. For example, catching a cheating wife. It would be so damn simple to wire up a car charger to the tail lights of a car and put the iPhone in a secure location inside the trunk. Not perfectly accurate since you won't get the GPS signal in the trunk but tower based triangulation will be fine for searching for a car in a few block radius.
I am willing to bet the first time its used in a really evil way, Apple will be forced to put some sort of restrictions on it or even turn it off.
Very cool feature though, I am happy to see it worked out for ya. Personally, I would have called the police and had the punk arrested. What he did was very unacceptable and he will do it again unless he is taught a lesson. You got lucky and got the phone back, the next person he jacks it from won't be so lucky.