Just to clarify the situation, since there seems a lot of confusion on this topic:
All Apple's devices with built-in GPS make use of assisted-GPS, relying on triangulation from phone masts. Without that, the cut-down GPS chip in the 'G' models will not give a very accurate fix. This may not be critical in a car, but it sure is if (like me) you are using your iPad to navigate at sea and want to avoid hitting the rocks!
So, in a nutshell, if you have a wi-fi-only iPad, or a GPS iPhone/iPad that you want to use for mountain hiking, sailing or flying (ie places without phone masts) then you need an additional GPS module.
As has been stated, not all GPS modules are compatible, as there is a lot of random kit out there - as with apps, Apple tries to protect consumer by vetting, and setting down standards (and no, I don't work for them!).
As well as the BadElf range, the GNS 2000 is also compatible. They will both give you a very accurate fix. There may be others out there, too.