Welcome to the Forum.
As you know, only the 3G iPad has GPS because the functionality for this is physically on the same chip in the iPad as 3G. However, as you rightly point out, it is possible for the iPad to retrieve some positional information from WiFi. However, it can only do that, of course (a) if WiFi is available and (b) if the location of the WiFi equipment is known.
So, in an urban area, where there are many WiFi hotspots, this will probably work OK because the location of these hotspots will be available to the iPad if the iPad is logged in to one of them and, because it's a commercial hotspot, its location resides in a central database.
This, however, would not be the case with your domestic WiFi - that WiFi has no way of knowing its location and probably that location has never been registered centrally.
There are now a number of external GPS modules that you can purchase that fit into the docking connector on the iPad that can provide GPS locations to non-GPS iPads. I mention this because, even if you were to use your iPad with location-based services successfully in an urban area, this would clearly not be successful in a rural area where there's not WiFi available.
If you'd like more information on these add-on units, I'd be happy to send you some links.
Tim
Scotland
