Jim Smith, who knows a thing or two about mobile, pokes around in the controversial consolidated.db database on the iPhone and comes up with this:
“I’m pretty certain that consolidated.db is used to seed the assisted GPS used for iOS location servers. If you open the map, or check in via FourSquare, it will look to see if the cell you’re in is one it knows about. If it is, then that greatly reduces the need to look for satellites. This also explains why it doesn’t store the older (or less accurate?) locations. My guess is that the algorithm says something like: have I been here before? If yes, is my accuracy better than last time? If yes, replace the old entry with a new one.”
Which answers the question that’s been bugging me, which is why that database wasn’t purged regularly. For this purpose, it’s important to keep it on your phone, where it can be queried fast.