Some iOS devices have a real GPS chip allowing you to get location data even with no Internet connection. I believe the last few iPhones all have GPS. Some of the iPad models have GPS. I don't believe any of the iPod touch models have GPS.
Obviously without Internet you can't show any map data unless it is part of the app, but the app will be able to record real location data.
Also, without Internet, the GPS may take longer to get an initial position. The devices with GPS have what is called "assisted GPS". This means Cellular and/or WiFi triangulation is used to help get an initial position fix quicker that without.
Devices without GPS use cellular and/or WiFi triangulation to get estimated location data which is far less accurate than devices with GPS.
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