Seems the echo chamber continues to hype this one, to the point where two users have decided to file a lawsuit.

The Wall Street Journal also is reporting that turning off Location Services still causes the iPhone to collect the location info for cell towers and WiFi spots. I however found the opposite in my testing with a freshly wiped 4.3.2 iPhone. In my test, I did have an initial cache created, but it never added any data even when I opened Maps with location off. If I turned location back on, the cache updated. I did the test by driving the same route south of my house twice, the first time with location disabled. I did a sync to a laptop not normally used, wiping the backups each time to force iTunes to do a full backup each sync. I chose to head south due to the initial cell data in the database showing cell towers up to 25 miles north of my home, but nothing south.

I'm going to file a bug with Apple since turning off location services doesn't clear the cache and see what they say. It does seem to halt the collection of new data though, so anyone specifically worried about this can switch off location services and encrypt their existing backups.

I didn't bother to dig deeper to see if any of this was sent to Apple, mostly since their EULA and response to congress last summer already confirmed they collect other location data on an anonymous basis if people use location services.