WiFi location is fast and works indoors and in the concrete jungle, that's the advantage. It may not be accurate but it could be self-correcting - the iPhone could feed info back into the skyhook system about the location of a new hotspot after it gets the call tower and GPS info.

I have no proof that it does, but I have an anecdote. The first time I plugged in my WiFi point at a new address, the phone connected and thought I was at the old address - until 5 minutes later when if shot me across the country. Never happened again.