Retailing for $5 (via the Cydia store), BTstack GPS was written by the same developer who created BTstack, allowing iPhone OS units to communicate with external bluetooth devices including keyboards (you may be familiar with his BTstack Keyboard application), mice, Wiimotes, and now, Bluetooth GPS dongles.
The software requires you to disable Apple's Bluetooth in the settings app. You then launch the GPS app, wait for your system to detect the external GPS unit, select it, pair, and then wait again as the GPS unit finds locks to the medium orbit satellites that provide GPS data. This can take a minute or two, so be a little patient. Once the lock finishes and the GPS data starts flowing, Ringwald's app will update, showing your current location on a map.
From there, you can hop out of the application and use any standard Core Location-enabled app. You will receive high quality GPS data in those apps in addition to its standard Wi-Fi positioning. That means, you can use utilities like TrailGuru and RunKeeper to track your position just as if you were using a standard GPS-enabled iPad or iPhone.
I tested BTstack GPS this afternoon, driving to and from some errands. Trailguru had no problem keeping up with my progress, monitoring my average speed, and creating a bread-crumb style trail of my travels.
BTstack GPS offers an affordable, functional solution for any jailbroken iPad Wi-Fi owner who wants to add GPS capabilities to their system. Between this software and the MyWi Wi-Fi hotspot utility, you won't feel as if you've missed the 3G iPad bandwagon.