If you enabled "My Location" in
Settings > Location & Security > Use wireless networks then your Cell/Wifi and/or GPS data will be sent to Google to triangulate your location if there is an application in the phone that requested for location. Your GPS data may also be sent to Google if you're using Google Latitude, Google Navigation, location-aware search, or use other location-based services.
EDIT: According to Android Central
Android does the same sort of thing,
boys and girls. And it's supposed to.
But it does it right. Instead of
saving days and weeks and months of
location data, it saves the 50 most
recent cellular GPS locations, and 200
most recent Wifi fixes. And it's
stored in a little file on your phone.
You can shut off Android's
location services and stop further
caching of location data. It's in
Settings>Location & Security.