A lawsuit was filed in Seattle this week that alleges Microsoft is tracking the location so users with Windows Phone 7 smartphones without the user's permission. The tracking apparently has to do with software on the smartphones for the camera. The software is on every WP7 handset out there no matter the brand.
The camera software allegedly tracks and transmits data to Microsoft even if the owner has specifically opted out of sharing information. In the past Microsoft has said they only track location data when the user has given consent to be tracked. The suit was filed on behalf of one user of a WP7 handset. There are details that are left to the imagination though including the name of the person filing the suit and how exactly this person found that the camera app was tracking users.
At this point, there is no more information the case. We know that tracking of people against their wishes with smartphones is possible. Apple has found itself in lots of hot water over the act in the past. Whether or not there is anything real in this suit remains to be seen. We will keep an eye out for updates on the case.