Generally, location on doesn't really mean much except for the fact you can now use Location Based Services such as VZNavigator or Chaperone.
The local law enforcement agency WILL NOT provide you the location of your device...even if it is lost or even stolen. They rarely use their ability to track the GPS anyway. They usually only use it when you call 911 and then hang up. They won't do a "courtesy track" for you.
Also, Verizon Wireless keeps and never receives any records of your phones location EVER...except the city and state you're placing calls from.
Hope this helped!