Yes, your approximate location can always be determined if your phone is turned on. One way is through the network; when your phone is turned on, it's constantly hooked to a radio tower, so that the network can find you to deliver your calls, SMS etc. By using this information eg. which radio towerl you're hooked to, your approximate location can be determined. Another way is by having a GPS function in your phone, this provides a better accuracy but it doesn't work well inside buildings.
Many countries require cell phone operators to be able to pinpoint their customers' locations within 100 meters, so the emergency services can reach them in case of emergency. Although the impetus behind location-based tracking is public safety, many commercial or free location-based services (LBS) are also available.
- Industrial : tracking of containers, trucks
- Information on demand : local cinema programing, weather in your city, localized web search
- Navigation: your phone becomes a GPS/Sat Nav system like those used in vehicles to take advantage of the connection provided by the network to display real-time information such as traffic updates, speed cameras, weather, etc...
- Social networking : sites like Google Earth, Flickr take benefit of your position to display to your friends your pictures, blog entries with your position. In some country you can even know in real-time where are your friends.
- Advertising : you can receive offers for the stores in your area
All operators have to follow stringent rules of privacy and will therefore be very careful to stick to the local laws when using private information such as your location outside of the mandatory emergency requirement. Generally this involves the user choosing to use the service, which is known as an "opt-in" approval.