In my pervasive computing class, which I currently teach, we covered recently different aspects of location based systems – by the way a good starting point on the topic is  and . At We discussed issues related to visual pattern matching – and when looking at the skyline of Sydney one becomes very quickly aware of the potential of this approach (especially with all the tagged pictures on flickr) but at the same time the complexity of matching from arbitrary locations becomes apparent.
Location awareness offers many interesting questions and challenging problems – looks like there are ideas for project and thesis topics, e.g. how semantic location information (even of lower quality) can be beneficial to users or finger printing based on radio/TV broadcast information.
 J. Hightower and G. Borriello. Location systems for ubiquitous computing. IEEE Computer, 34(8):5766, Aug. 2001. http://www.intel-research.net/seattle/pubs/062120021154_45.pdf
 Jeffrey Hightower and Gaetano Borriello. Location Sensing Techniques. UW-CSE-01-07-01.