Earlier today, Apple released an FAQ to address the controversial location debacle. Apple acknowledged that there was a bug within iOS. When Location Services was turned off, the iPhone continued to updated WiFi and cell tower data from Apple's crowd-sourced database.
To address this issue, Apple announced that it would be releasing a software update within the next few weeks, most likely iOS 4.3.3. In addition to rectifying the location-tracking issues on iOS devices, Apple might also patch @i0n1c's untethered iOS 4.3.x jailbreak exploit, leaving you with a tethered jailbreak.