After Palm's Pre was heavily criticized last week over claims that the handset collected location data regarding the user and transmitted that back to the company, a developer has spotted that at least one third-party iPhone library, in use by several apps, does something similar. The library is by Pinch Media and is used to track app owner data; it does this by recording not only location when you first start the app but your physical movements (among other things) while the app is open.
Pinch Media's library is used by developers - such as those behind free iPhone titles Camera Zoom and Twitterfon - to collect analysis data on app usage and common problems. However the library does not give the user any way of monitoring or shutting off the tracking; agree to it when you install the host software, and it will continue to gather data for as long as you use the app. If you don't have a network connection then the location data will be cached and sent when you're next online.
Full list of collected personal information after the cut