You're mixing up "assisted GPS" with wifi location determination. Assisted GPS uses data broadcast by cell towers to allow a GPS chip to get a much faster lock on the satellites. Requires the 3G ipad model since they are the ones with a real GPS chip. 3G data does NOT need to be activated (speaking from personal experience) for this to work. Wifi only ipad's use a Skyhook type location determination (don't remember if it's actually Skyhook or an internal Apple version) that uses wifi router MAC addresses cross-checked to a location database. Basically there's a database of wifi routers and their locations, and the wifi ipads can get approx location through this mechanism.
Perhaps they've changed something, but Navfree for me has the entire US as one map. I've not needed to d/l individual maps.
In any event -- personally I find using my iphone for a driving GPS is much better than using my ipad. Perhaps if I had a passenger to wrangle the ipad, but it's too big to sit in the console and setting it on the passenger seat makes it unusable due to reflections of the sky. Perhaps with a mounting bracket; but when I travel for business I'm not hauling around an ipad mounting bracket to figure out how to put in a rental car. (at home my vehicle has built in nav, so I only need nav on my iphone or ipad when in a rental car)