That's showing your location based on the signal, etc. I believe

Anyways you can get very precise by turning on GPS, go Home, Press Menu, Settings, Location, Enable GPS Satellites

more battery wasting, but it's no longer an estimate at that point

 

I just checked mine, and it's about a quarter-mile off, too. However, that's an improvement from the mile it used to be off. Also, interestingly, it was formerly off a mile west, now it's about a quarter-mile east.

 

i tried this and got better results.

turned off "use wifi and network to determine location"
turned on "use gps"

getting much better acuracy now.

before i had both turned on.

 

I too have this problem of Google Maps My Location's Accuracy. I shall explain it in detial.

I got an unlocked phone off Ebay and it was working all fine. It even showed the accurate location on Google Maps (My Location), both using Wifi and GPS. After which I did not use Google Maps until recently. Meanwhile I got a Cupcake update and many updates for Google Maps too ...

So, just the other day when I tried to access My Location, it showed that I am somewhere in Sanata Catrina, Mexico. Im sitting here in Bangalore, India wondering how that is that case. Sometimes it shows that I am in Germany too !! Even the sky map sets the location from Mexico !! It's really Annoying.

I read through several posts and did waht they all said Use Wireless Networks, Enable GPS Satts, cleared map cache et cetra ....

I got a funny feeling that this is google's lil game ... Cos this phone is actually a German phone (QWERTZ keyboard) and an unlocked one. (don't know how it was unlocked, though). I know google can find out unlocked phones and block them from getting paid apps from the market. Is this a similar dirty game played bythem, cos I remember checking the Share with Google box in Security and Location.

All the pros out here, please look into this, and let me know is it time for a root ?
Will rooting fix this ?
If then, Cynogen or JF ? or anything else ?