Christian Sandvig: Is Google's Spy-Fi About Privacy, or Something More?:

Open your smartphone and you may be pleased to find that its mapping application now fixes your location quite accurately. Just a short year or two ago the GPS signals used by these devices were painfully inaccurate -- particularly in the canyons of cities where we tend to want them most. Then came the remarkable insight (from companies like Loki) that when people buy Wi-Fi access points at Radio Shack and install them in their houses, they don't move them around very often, or turn them off. Each Wi-Fi access point, it turns out, has a unique number that it broadcasts continuously in something called a beacon. The beacon, aptly named, flashes out with the regularity of a lighthouse.

Google wants to trawl the streets for Wi-Fi signals because if it can find these beacons and organize them, then the next time you drive by that same beacon it can guess where you are...