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What Latitude can do?
Once you and your friends have opted in to Latitude, you can see your friends' Google icon displayed on Google Maps. Clicking on their icon allows you to call, email or IM them, and you can even use the directions feature on Google Maps to help you get to their location. Google says Latitude works in 27 countries and with many mobile platforms including iGoogle with your computer. The list of compatible phones are:
How it works
Let's say Bob wants to share his location with his girlfriend Jane. He invites her to accept his invitation through his mobile device or computer. Then Jane can accept and share her location back; accept but not share her location; or completely reject poor Bob. If Jane has chosen to share her location with Bob, she can decide whether to share her best available location or simply which city she's in. Jane could also hide her location to keep ol' Bob in the dark from time to time, or if Jane breaks up with Bob for her neighbor Richard, then she could just remove Bob from her location list altogether. In addition to restricting specific people, Latitude will also let you do a blanket location setting for all your contacts. You can choose to let Latitude detect your location automatically, you can also set it manually if you prefer or you can hide your location completely. (Source: PCWorld article)