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The camera on existing iPhones can already capture GPS or triangulated WiFi location data on the pictures it takes. However, there's no way to view where photos were taken on the phone itself; the pictures have to be synced with a desktop program such as iPhoto that supports geotagging.
In the upcoming iPhone OS 4, just like iPad, there's new support for viewing a map of geotagged photos within the Photos app on the iPhone and iPod touch. A Places tab switches the view from albums of thumbnail views to an integrated map marked with pins (shown below).
Similar to Apple's desktop iPhoto program, the new Places feature within the Photos app can pull up individual pictures or groups of photos from any marked point on the map.
Events, Faces and Places
Previous beta releases of iPhone OS 4 have also included tabs for Events (showing photos by date) and Faces (grouping photos by the people tagged within them), both of which are now missing in the latest build.
Update:Another set of screenshots provided by a second beta tester indicates that the beta 4 build also supports Events. It may be that the Events tab is only displayed when there are photos from multiple days. And because Faces data appears to be synced from iPhoto, that tab may only appear if the mobile device has been synced with a photo album containing tagged identities.
The current beta 4 build is the first one seeded to outside developers with a functional Places user interface, so the change doesn't necessarily mean the Faces features have been dropped or will not appear in the final release.
It is likely that support for Events and Faces will be in the final release, as these features already exist and work fine within the iPad's iPhone OS 3.2 build. At the same time however, the "pinch to preview" album user interface used on the iPad will likely need to be modified or simplified to work within the smaller screen of the iPhone and iPod touch.
As depicted in the Events photos (below), it appears Event albums will be shown as a standard list. It would make sense that Faces would be depicted the same way on smaller mobile devices.