Find my iPhone shows wrong location

My family has 4 iPhones and an iPad. Find my iPhone works really well on three of them. When I use it on my first generation iPhone using the up to date OS and my MobileMe account, the phone shows a location several hundred miles away. This is also occurring with the iPhone map software. It is on a Pay as you go contract with O2 and occurs on Wireless or on the Pay as go. As far as I am aware, all the settings are correct. I can get it to play a sound etc from the Find my Iphone app.
Any guidance very much appreciated.
Phil