This device probably has an A-GPS.
It uses (A-GPS) Cell tower to do quick triangulation and then lock into real orbital satellite GPS.Without cellular service, it reverts to normal triangulation which takes longer to lock-down.
If you use an app like Co-Pilot or Navigon, you won't need internet connection. I prefer standalone apps like Navigon for these reasons.
However, without cellular connection, the GPS acquistion or lock-time will be longer. 1-3 minutes vs 15 second (with cellular A-GPS).
The iPad works like this. I get 5-second lock w/ 3G. Without 3G, it takes about a minute. I know this for a fact because I took my iPad abroad without cellular signal and GPS works.
The "A" in "A-GPS" means "assisted" people have this misconception it only uses cellular radio. That is not true if it is a true A-GPS system.