Latest Corrections From An Expert Source:
GPS is a navigation system using satellites orbiting the earth and a handheld receiver. The GPS receiver can receive transmitted signals from these satellites. With signals from a minimum of 3 different satellites, the receiver can calculate your exact location on earth.

Knowing your exact location on earth is pretty useless, without a reference waypoint or a map, because it is just a number. With the help of the GPS receiver and a map, you'll able to know your location, in reference to another point. With a map, the location will help you pinpoint your position in a map. It will be useful on your hiking trip to Nepal, when you're lost in the Sahara dessert, or when you lose your direction while driving in M'sia (I think this point is a subtle reference to me but I shall pretend to ignore it :p)

There are many units of measurements for GPS location, just like the different unit of measurements for length. To make things more complicated, earth is not flat. To "flatten" the earth on a table, like a map on the table, you can do it differently. Imagine peeling your orange skin. You can peel it in different ways, and still be able to "flatten" the entire skin on the table. That is exactly how the earth surface is "peeled" out, flatten and mapped.

There are different ways of "flattening" earth for mapping, adopted differently in each countries. These standards are called datums. They are always indicated in accurate maps and atlas.

Why all these information? Because you need to know how the map was created and what unit to use, in order to navigate correctly, base on the map and position collected from GPS.

If you think that's hard, think about your next visit to buy clothes. Size S,M,L,XL is different from store to store. You'll might know that size L of clothes made in Singapore, might mean size S from overseas tailors. Your sleeve lengths might be measured in cm here, but others might use inches. Therefore, you'll need to know the "sizing" and the correct ruler to use ;)

There you have it, an expert's explanation! Cool huh?? :)