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In this update :Optimized for iPhone 4, 3GS and iPad Wi-Fi + 3G* (iOS 4.x, 3.2.x and 3.1.x), Gyroscope aided compass and improved motion dampening
For those not familiar with the app, here's a demo video (ver 2.2):
As apps like this get more and more refined, there's gonna be less need for a "standalone' gps system.
Go, and see (where you're looking)
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