Loopt doesn't run in the background on the iPhone like you would think. It actually runs on servers at ATT pulling already available GPS data on your cellphone's location from the towers.
After lots of work, apparently--up to "six or seven" partner companies in the network infrastructure. All this engineering tinkering has resulted in an always-on Loopt iPhone app that runs in the background on the network rather than the phone. Presumably this has a knock-on effect on the precision with which one can be located (the background Loopt app isn't accessing the iPhone's GPS to find out where you are, and it's most-likely using cell-tower triangulation methods, much as Assisted-GPS units do to boost their location-sensing powers).