I've used my handheld Mio GPS during flight (GPS is receive-only, so allowed during flight). It works ok as long as I'm in a window seat. Further inside the aircraft you're basically inside a Faraday cage = no signal. It's really cool to capture a 3D track and then plot the 3D flight path in Google Earth.

I've seen various people theorize previously that airspeed or altitude might be the explanation for failure to get a position fix, but neither of those are true - it's just satellites in view and signal strength.

Technically you aren't allowed to use Bluetooth devices during commercial flights since they transmit, and you aren't allowed to use any electronic devices during takeoff/landing. In reality both restrictions are probably overly cautious. Researchers testing and recording the cabin RF environment on commercial flights report that virtually every airline flight has at least several people who have forgotten to turn off their cell phones and/or WiFi devices. However I wouldn't recommend violating airline restrictions, or might get you kicked off a flight - you might as well argue that your 125ml toothpaste tube is not a dangerous explosive. :-)