You may have been hearing much about iPhone user's movements being tracked and stored without the user's knowledge . Researchers found that Apple started recording location log, that is continually updated, on a file inside your iPhone and on the Computers that phone is sycned since iOS 4.0 release in June 2010. The log file named "consolidated.db" contains a list of coordinates and its associated time stamps in seconds.
The scary part of this log file is that it is stored without even having any sort of password protection or encryption. That means anyone, any malware or even your jealousy spouse or employer, can read through this location log file without having much trouble, as long as they can access your computer. There is no idea yet why Apple is collecting this data. The chances that Apple is 'accidentally' collecting the location data is baseless since the same is being stored on phone and computers that phone is synced with. It could be part of some amazing features they may be unveiling in near future, but we do not know.
Many of us already know that our Cell-phone operators collects this sort of data inevitably as part of their operations, mainly to connect us to the nearest tower to efficiently route the calls. The only difference here is that Cell-phone operators protect these information behind their firewall or even through encryption. So people can't simply gain access to it, unless with a proper court order, mainly for Police and other government authorities. But there is serious vulnerabilities with Apple's collection of location data, considering that it is not protected.
The same guys- Alisdair Allan and Pete Warden who are British Security Researchers- discovered this location log file has recently released an application, iPhone Tracker, for Mac users to analyse location details. It is an open source application and can be downloaded by clicking here, if you use a Mac computer. There is a similar Windows application found here.
You can watch a video on what is this movement tracking is all about here.