Good grief, Charlie Brown. This thread is a prime example of why non-engineers should avoid discussing technical topics.
Sure, the Infineon chip has the capabilities of hooking to a GPS, 3G coprocessors, and speeding up Java. Which is useless, since the iPhone has no GPS, 3G coproc, or Java.
Likewise, the chip can be used to interface to a keypad and SD memory chips, neither of which the iPhone has. Just because it can support something, doesn't mean it's there.
As for location awareness, yes AT&T uses the tower location method for 911 calls. However, this method means the cell phone itself normally has no idea where it is, since it has no knowledge of what the towers are doing to find it.