It sounds like it will be akin to Google Latitude, Loopt, Facebook Place, and other services like that. One big problem is that those are all free: if this is tied to MobileMe, Apple will either have to drop the $99 subscription for the service (which has been suggested before) or see not that much adoption, since MobileMe isn't exactly s staggering hit.
Of course, there's the other issue: all those other apps are cross-platform, and its unlikely we will see any Apple developers writing for Android or WP7 anytime soon.
Of course, in March of 2010, it was noted that Apple had applied for a patent on an iPhone location-based social networking service (iGroups). Could this be related?
