I think B1 is the 3volt lithium backup cell for keeping your GPS receivers "memory" backed up when the main power is switched off.

The purpose of this battery backup is to make the "Time to First Fix" (TTFF) shorter as the GPS will have some of the data it needs remembered from last time it was used.
Time To First Fix is the time taken from when you power (the GPS) up, until it reports its location (lat/long etc).
It could take a minute or more without the battery backup to report its first fix.
You could run your unit without the battery backup - but TTFF will definately take longer that way.


I got shipping notice/email from BG Micro today that my order had shipped, as Its going Airmail, I won't expect it much before early next week.

You probably don't need to expensive Switching Power Supply - the 7805 type regulator will work, provided that the excess voltage above 5 volts can be easily removed as heat from your design.
If you need a cooler operating design - then the switching Power Supply may be cooler/generate less heat.

It may also tolerate a wider voltage range - I'm not sure on the difference from the 7805 type design..