I was one of the lucky bunch to get an early iPhone 4, so my first thought, naturally, was "I wonder how good the location privacy settings are?" This is why I work at CDT. The truth is, the location privacy settings are not terribly different from my preview of Apple's iOS 4, but there are a few similarities and differences worthy of note.
First of all, to access location privacy settings, you must first go to your General Settings. As before, the location setting looks like a simple toggle, which is somewhat misleading, as there is certainly more control than that. Between April 13th and June 24th, a slight change occurred in the full location privacy controls, seen below.
April 13 June 24
In the pre-release version of the operating system, there was no explanation at all for what those little icons meant. Now, we are told explicitly that the arrow pointing northeast is the location services icon, and that if it shows up in this application list, it means that I have given that application location services permission. This location services icon will also show up in the status bar of applications that use location services, as shown here. This is probably the single most useful addition to the iPhone's location services controls since a GPS unit was introduced to the device, as before now, it was very difficult (and sometimes impossible) to tell if you were being tracked.
One small problem, however. If the application you are using does not have a status bar, you'll have no idea that the application is using location services unless you jump back into the Settings application (or if you wait for 24 hours, which is when location services are reset). I've also noticed that the location services icon doesn't show up on all applications. Note that in the earlier screenshot, Accuweather was in my list of applications that I'd given location services permission to. In the screenshot below, however, the icon is not showing up on the status bar seen below (and yes, it is THAT hot here in DC).