The article points to a bit of legalese which says that 'in order to provide location services, apple and their partners and licensees' etc.
In other words 'Some apps or Apple services (e.g. MobileMe) may have to figure out where you are and send that somewhere'. This should be a no-brainer.
As one commenter said, it's just scaremongering for pageviews.
This is one thing the Palm Pre got right. When you first turn on your phone, it asks if you'd like to always allow location info, or if you'd like the phone to ask each time. If you say no, any app (even the pre-installed ones) must ask every time it wants to get your current location. If you say yes, it gets out of your way and doesn't bug you unless you change it in the settings.
Of course, if you say yes, it also periodically sends data behind the scenes. Strange, but it's better than making this completely uncontrollable.
From what I understand, the article is about the fact that Apple may be keeping track of the devices' position at all times, as part of the OS basically.
The prompt that asks you every time if you want to give your location is for when you're using apps.
In other words 'Some apps or Apple services (e.g. MobileMe) may have to figure out where you are and send that somewhere'. This should be a no-brainer.
As one commenter said, it's just scaremongering for pageviews.