I have alike problem with geolocation in 770 , OS 2008He.
770 comes with external bt gps.
I have installed geolocation for OS 2008He, made by Nokia
and there is a bug in GPS location in Control panel
as Nokia can't connect to a remote bt GPS device as long as GPS status fix is not ok.
I must to use another application, Maemo Mapper, to get bt GPS connected to get geolocation working in 770
and have test web page to get showing GPS data (3D fix, 2D fix, no fix).

Unfortunately geolocation is not reliable and one is on and ok
and another is out.
But the key issue is 3D fix received from GPS.

If your internal GPS doesn't work, try external bt GPS device, connected from Control panel (pair it first).

bt applet was avilable for 2007He , 770.
I am not sure about bt applet (python) for 2008He, 770.

I would like to try to install Maemo5 Geolocation on 770, 2008He,
as Geolocation in 770, N800, N810, N900 all work different.

follow-up

just tested
maps.google.com/maps/m? and /m
on PC Vista + Firefox 3.6 + Geolocation enabled for the above page
and Geolocation by Google didn't work for IP address-based geolocation.

So, does anyone know if a fix is coming for this?

Well, yes, geolocation will be integrated with the browser in PR1.2, AFAIR.

Do you know whether it will be necessary to remove maemo-geolocation before updating to PR1.2?

Is this an issue still with you guys? Since 1.2 I no longer can access Maps via Google. OVI Maps still works of course. Can anyone help? I need both maps for what I do. Thanks.