Understanding GPS
The US GPS system is a collection of 24 satalites placed in a geosyncronous orbit around the earth. By knowing exactly where these satalites are with regard to the earth, comunication with a GPS device can be trilaterated to calculate it's postition as well.
Earth is a rock
The Earth is not spherical. Neither is it an ellipsoid, although we use an ellipsoid to approximated it. The Earth is actually a geoid, or shaped like a rock.
The System
The standard for this is constantly in a state of flux, but at this moment, the system is defined by the WGS-84 standard.
[WGS84 Implementation Manual]
Europe has been working on developing their own Galileo GPS system, mainly in the interest on not relying on a US system that can be locked out as a negotiating tactic. Russia uses it's own GLONASS system.
Mathmatics
