Like many people, I upgraded to iOS 5 on my iDevices very soon after it came out. I noticed that Location Services has a lot more options than previously. What is interesting is that they have made the icon for Location Services in the status bar off by default, and they buried the option to enable it. Once you enable it, you'll discover lots and lots of services looking at your current location. I find this a bit too much of an invasion of privacy. Here's how to tone it down some.
To get to the settings, go to Settings→Location Services and scroll down. At the bottom of all the applications that want to use your location (and that will be a surprising pile of applications!), you'll find the "System Services."
There are (at the time of this writing) six different services you can disable. Before you do that, though, scroll down on the System Services screen to the very bottom. There you will find an option for Status Bar Icon which is disabled by default. I enabled it, then I started noticing that my location icon was always on! I started disabling system services until I got to a behaviour that I thought was acceptable.
- Cell Network Search seems like a good use of your location.
- Compass calibration also seems reasonable.
- Diagnostics and Usage smacks of the problem we had a few months ago with Apple reporting all the places we had ever been with our phones. I say 'no, thank you' to that one.
- Location-based iAds. Really? Like there's someone out there saying "please, please, can you send me more effective and targeted advertisements!?" Who really wants that? Another way to look at it is that advertisers are getting some information about you, or even just aggregate information about the movement of people near them.
- I disabled Setting Time Zone. Seems like a reasonable thing to leave running, but what I found was that the Location Services icon was always active if I had that turned on. To me, that (a) is probably running down the battery, and (b) defeats the purpose of having the status bar icon come on and off. If there's a system service that keeps it on all the time, it's not a useful indicator.
So I recommend turning on the status bar indicator and then see how often someone is snooping on your location.