Yes. I have not tried the WorldCallPlaceAndTime App but it looks like what you want. Below you can see the summary and screenshot from appbrain.
EDIT: Based on the comments on appbrain, this app just determines the caller's location based on the phone number's area code. If you want to know the phone's physical location, you'll need to use something like Google Latitude, which does not give you the caller's location during the call (yet).
This program shows a small CUSTOMIZABLE info window during incoming/outgoing call: country, region, city (or mobile operator) and LOCAL TIME in that place (worldwide)!
2.0: colors option for donators, bugfixes
tag: call location,calllocation,who's calling,wer ruft an,caller id,who called
