I believe you need a cellular iPad because they are the only ones that include the gps chip however:.......you don't need the cell connection to be active
There are map apps that download the map data in the app and don't need a connection to constantly update maps navigon is one there are many others that are cheaper, I prefer navigon but to each his own the free ones ( like google maps) generally need a connection to the net , wifi or cell , to constantly update. Then there are some that can download just a entire route in advance .. As you can see there are many flavors
To answer your question
The iPad uses it's own gps chip and does not need a connection other than that to know where it is . it doesn't even need to be " on the dash" to work however is does need a "view" of the sky .. I've held it while sitting in the front seat and it works fine