TechCrunch has a nice article on the location tracking of Android based devices.
It is an “opt in” thing, but I suspect that most people are robo-approving all the questions they are asked when they are trying to get their new phones or tablets set up for the first time.
In this case, you may have given Google permission to track and maintain high resolution location information on you. That information is used to discover where you live and work, to improve weather, travel, and traffic information.
If you follow this link, you can see a track of your activities for up to the last 30 days. Really cool in a very frightening way.