My understanding is hte iPhone doens't actually have a GPS receiver in it at all. It only uses a fuzzily defined "assisted GPS" which is basically based completely on 3g towers.
The original iPhone had no GPS and always used cell tower triangulation. This varied a lot - I remember in Manhattan, NY it could track me almost to the street number; on the other hand I once turned it on in a moving car in rural NSW, Australia and it drew a circle approximately 500km in diameter.
They don't use the GPS satellites at all.