To add to my previous comment. Before there was GPS, there was "inertial guidance systems" (IGS) that were used to navigate by. IGS used a combination of accelerometers and gyros. The gyro would allow you to calculate which direction you were going and the accelerometers would allow you to calculate how far you have gone. At the time, IGS was the most accurate navigation system available. If properly set up, a good IGS could show you within a short distance where you were and what your altitude was. They continue to be used as backup navigation systems for some things.
The problem with gyros at the time, they had to spin up and stablize before they could be set and be reliable. The MEMS gyros used in the iPhones do not have that problem. With the new technology, IGS without the problems of the old technology are available, and in some cases, more accurate than the older systems.
With the proper app, all a pilot has to do is do a "set" when he first gets in his plane for it to provide navigation backup for him. I am not sure if the iPhone will be as accurate as a commercial/military IGS, but it should do in a "pinch". It would also be great for hikers and campers. With the solar flares that a coming in the next few years, effecting the GPS satellites, it would be good for anyone to have an IGS backup to their GPS. I would really like to see HTC have a gyro in their next phone. I am sure that someone will write an IGS app for it. I would be willing to provide financial support for such an app.