Apple iPhone to use GPS?

During Steve Job’s Macworld Keynote speach today, a new ipod iphone device was accounced. Part of the demo included integrated use of Google Maps to connect you with local retail stores. The phone seemes to know where you are, so does this mean integrated GPS? If so, this could be the ultimate Geochaching device. I’m hoping they expose an api for the GPS so that I can start developing geocaching widgets for it.

[EDIT]: Sadly, it turns out this is not the case. No GPS for the iPhone. In fact, there is question now weather or not we will be able to write custom widgets of any kind for it! That would majorly suck.