In the 3G network there are several methods for determining the handset location, UE (handset) based GPS, UE with AGPS network assisted, then CellID+RTT, CellID dependant on the accuracy requested by the SMLC. If all 3G positioning methods are not fulfilled then the handset will switch to 2G and use 2G positioning methods.

I beleive that 911 will override any settings in the phone and switch on the GPS, but even if it doesn't have a GPS signal the network can still find the handset location using other methods.

Positioning can also be requested using a mobile terminated location request, this is completely invisible to the end user. I believe use of this feature would require a warrent of some kind.