Alex Levinson, a student at the Rochester Institute of Technology gave us more information about the problem, which he described clearly here. It looks like the file that was discovered by Alasdair Allan et Pete Warden has existed since iOS 3 and has been known since the launch of iOS 4.
Under iOS 3, it was a .plist file called h-cells.plist, which was in /root/Library/caches/locationd and contained the same information as the iOS 4 file. With the sandbox design for third party applications and multitasking introduced in iOS 4, the file had to change in order to allow apps to access it.
It is now called consolidated.db and would only be used by applications requiring location services. A network traffic analysis of connections to Apple servers shows that the information contained in that file is not sent to Apple. Anyway, Californian law forbids Apple or anyone else to do so.
However, there are still questions that remain unanswered. Why is the data kept in the phone for an unlimited period of time? Why are they copied back when the device is being restored? And finally why isn't such a file encrypted?
A possible explanation would be that it could allow the device to calculate its position without activating a GPS or Wi-Fi connection. Calculating the position with the recorded positions and using the strength of the carrier's signal using a special algorithm would probably consume less electricity and therefore safe on battery life.
Nevertheless, Senator Al Franken (D-MN) sent a letter questioning Steve Jobs very precisely on the matter. We should have more information in the near future.
