wavmaker, I can assure you that WiFi and true GPS are totally separate from each other. Having said that, I have seen some ads that have touted a phone as having GPS capabilities, but in fact the location tracking was actually just tracking the WiFi signal location (usually very inaccurate). Maybe that's what the techs meant.
Now, for instance, Google Maps can't update its maps without a data/WiFi connection, but the newest update allows us to cache maps for a particular destination so that they can be used when the data/WiFi connection is absent (approx. 10 mile radius only). In some circumstances, apps like Mapdroid may be needed for navigation when a data/WiFi connection is not available.
If the phone has true GPS, it has a separate GPS radio that is used ONLY for location tracking...just like the GPS devices used in cars...they are GPS only devices. WiFi has it's own, separate, radio system that's used for transferring data between like devices.
I use Google Maps whenever my WiFi can connect (I don't have a data plan), and Mapdroid for all the other times. Works well for me.
I hope this was clear...I'm dealing with a bunch of distractions at the moment.