How does iPhone 3G GPS works?

i have a question, is the gps in the iPhone 3g free? (has a chip in it, and wether u are in the streets, home, etc you get the location) or it uses the 3g data plan/edge or wifi to get the maps.My question is:

if i donthave a data plan, will i be able to use the new tomtom app from apple store without paying more than the cost of the app (no internet fee for using gps=)

THANKS!