The size of the splash is a bit puzzling since there is almost nothing new or novel in Latitude. But there are reasons to talk about the service anyway.
Latitude is enabled by an application that can be loaded on some mobile phones and laptop computers. The user can configure the application to send Google the actual location of the device. The user then configures the Google Latitude service to enable other specific phones or computers to receive information on your location. The information provided to each of the other devices can be your actual location, a location you select (whether you are at that location or not) or no location information at all.
There is nothing particularly new about the service Google is providing with Latitude. Location-based services have been available for most of a decade. There are multiple services around that enable parents to track their kids' mobile phones or employers to track their employees' BlackBerrys. But, probably because it was Google announcing a service, the press paid more attention than the actual service warranted.
Also, probably since it's Google, the privacy community paid a lot of attention.
The most far-out response to Google Latitude has been from Privacy International, which engaged in a little hyperventilating over a quite real, but easy-to-fix flaw in the current Google application. Because the current version does not constantly tell the user that location reporting is enabled, it is theoretically possible for someone to enable Latitude on a user's phone without them knowing it.
As a card carrying member of the privacy community myself I do have worries about Google's new service that I've not seen expressed elsewhere.
Google is basically a set of vast databases with interfaces to cash registers. The company knows where almost everything is in the internet - you can tell Google to ignore your corner of the net if you want to but if you do so your corner of the net is in effect invisible to anyone who does not already know of its existence.
Google also knows everything that its users are interested in, and in many cases, every place they have wandered on the internet through its recording of search queries and through many companies subscribing to Google Analytics. Now, for the users of Latitude, Google knows every place you wander in the physical world.
I have no idea what use Google might put all this information to and we may never be quite sure what Google does in fact do. Google's privacy statements (general: and for mobile) are less than precise when saying what use it makes of the information it collects.
These statements also do not say how long Google holds on to information, although elsewhere Google has given hints.
Google's introduction of Latitude further legitimises third parties tracking where people are (the phone companies have been doing it just about forever). At the most benign it will mean more pop-up ads for the Starbucks a block away from where you are. We will only find out about the other extreme over time.