Cellular operators like Verizon Wireless and Cingular Wireless know, within about 300 yards, the location of their subscribers whenever a phone is turned on. Even if the phone is not in use it is communicating with cellphone tower sites, and the wireless provider keeps track of the phone's position as it travels. The operators have said that they turn over location information when presented with a court order to do so.
This is according to Matt Richell in a December 10, 2005 NY Times editorial.
If in doubt, turn your phone off. If you need more assurance, remove the battery.
December 10, 2005
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