Things I'm interested in in location-based services:

• Rough "where am I?" type stuff when in a city, on a train etc. when a GPS fix may take too long and something rough is enough. Also feeds into better A-GPS.
• Location-aware alerts: "it'll take 15 mins to get there from here", already mentioned; but also "I'm not in London, don't remind me about anything work related unless some other flag has been set"
• Proximity-based alerts: the "remind me to .... when near ...." already mentioned
• Location-based profiles: when at home, don't flash an LED at night when I get an email; but do everywhere else.