I think this particular question and answer is what concerns many of the people using the iOS platform:
9. Does Apple currently provide any data collected from iPhones to third parties?
We provide anonymous crash logs from users that have opted in to third-party developers to help them debug their apps. Our iAds advertising system can use location as a factor in targeting ads. Location is not shared with any third party or ad unless the user explicitly approves giving the current location to the current ad (for example, to request the ad locate the Target store nearest them).
Apple did say that it plans to release a software update next week that will
reduce the size of the crowd-sourced Wi-Fi hot spot and cell tower database cached on the iPhone, cease backing up this cache, and delete this cache entirely when the Location Services feature is turned off.
Reading the Apple FAQ, it appears that Apple doesn't think the tracking is a big deal. Is it? Adrian Kingsley-Hughes seems to think there are reasons for concern. On a ZDNet blog, he wrote:
It's a big deal because there's no opt-out, and no way for the user to have a say in whether the data is collected or not. As far as I am aware, the iPhone is the only handset that stores this kind of data. If there's no point to this data, it should be collected and stored. If there is some point to it, Apple needs to say what that is and offer users a clear opt-out. The current situation represents a blatant abuse of user's right to privacy. When you broadcast your location using FourSquare (polluting my Twitter stream you are doing so voluntarily. The same when you geotag a post on Twitter or Facebook. The same when you turn on MobileMe's "Find My iPhone." The difference with this logging is that it happens behind your back and you have zero control over it.