Only the Wi-Fi + 3G models have assisted GPS (Global Positioning System) to facilitate Location Services. Assisted GPS works by using location information from the AT&T data network to speed up the acquisition of GPS satellites. Many apps use a GPS receiver to determine where the iPad is located.
So far, 40 applications have been certified by Apple as iPad 3G-only compatible.
Wi-Fi only models include a digital compass, but lack the internal hardware to pick up radio signals from GPS satellites and land-based cell towers.