As of iOS 5, the simulator has a configurable location.
Under the Debug menu, the last entry is “Location”; this gives you a sub menu with:
- Custom Location
- Apple Stores
- City Bicycle Ride
- City Run
- Freeway Drive
Custom Location lets you enter a Lat/Long value. Bicycle ride, City Run, and Freeway Drive are simulation of a moving location (in Cupertino, of course).
Of course, this does nothing to help with debugging for iOS 4 (or earlier); but it’s a definite improvement!