I don't understand what the big deal about this is if one looks at the facts. Anyone even remotely paying attention to IT news and familiar with their phones knew about collection of location data.
I don't want to link the fox news report that made a big deal about this because they made up a story just to run it with the iphone tracking story, BS is about a "device that cops can use to extract the locations from your smartphone simply by being in bluetooth range". They went on to allude that it occurs without your consent and bypasses all password lock and security measures.
I installed the Android app to verify this, nothing is stored on my phone since I always had the location services disabled. I run 2.3 and none of the GPS data is stored either.
Disabling the location services on the iphone should have the same effect as well and unless it doesn't, the story is hoax.