If you have the latest update, CL14 (Menu, Settings, About Phone, Baseband Version), then it should work decent outside. In your car it might not be so accurate but should still work. Some people on here are not haveing any accuracy problems at all though. If you do not have the update, then take it to a Sprint store after backing anything you need to backup, cross your fingers, and they should be able to do it for you.
As far as using it for hiking or waypointing, there are quite a few apps that will do that. I use My Tracks for hiking and jogging. There are car finder type apps too, I just haven't used any of them.
Also, when you use GPS, be sure to check-mark both the "Use Wireless Networks" and "Enable GPS satellites" in the Menu, Settings, Security and Location section. If you have problems with your screen going in a wake, sleep loop (known issue), then turn "Use Wireless Networks" back off until you are ready to use it again. 2.1 should resolve this since it has CDMA compatibility by default, where 1.5 was "hacked" to support it.