What does the "Allow mock locations" option under the Applications >> Development settings page represent?
Fake GPS data. Presumably this is for testing apps that use GPS, so you don't actually have to travel all over the world :P
Apps such as Location Spoofer take advantage of this. You could probably fake Foursquare checkins or something using it, but they do check to make sure your checkins are "realistic" so you probably don't want to check in to London UK and Melbourne AU within the same hour.