Now that same service looks to be leveraged, eventually, for gaming.
Makes sense to us. Such a feature could be used to unlock levels or weapons by requiring the user to be at a certain location or establishment. Going further, the level-up could be time-constrained, requiring the player to be at a certain place, at a certain time.
Of course with our corporate overlords, we could also imagine commercially sponsored games by chain-stores, such as coffee shops or your local Best Buy. We're not too sure about the 'coolness' of the latter as we can't think of any hip corporate-branded games, but the potential at least exists.
Finally, the potential to leverage such geolocation gaming could result in 'flash mobs', at least according to Microsoft's independent software vendor developer evangelist Paul Foster and OS and mobile product manager lead William Coleman, who in an interview detailed WP7s GPS potential. It should be noted that all of this is up to the developers to take advantage of and so far, only Crackdown 2: Project Sunburst uses such technology.