There have been several threads on Bike Forums regarding GPS; a "search titles only" search for "GPS" may prove informative.
Originally Posted by MMACH 5
On a flat trajectory, the speed is as accurate as any device you can find. However, since a GPSr only measures latitude and longitude
I'm no expert, but I recall reading that modern GPS receivers derive speed measurements from more than just successive lat/lon fixes. Perhaps they also consider the doppler shift of the signals? I'm not sure.
Regarding altitude in distance measurements, I have noted that if I create two waypoints with the same lat/lon coordinates but with altitudes differing by several thousand feet, my GPS units (Garmin handhelds) don't consider them to be very far apart. I guess that these units calculate great-circle or rhumb line distances between points based solely on lat/lon, neglecting altitude. I'm not sure offhand how their units accumulate trip odometer distances. When I really care, I post-process track logs myself and take altitude into account.
Happy trails,
JAB