I work for a GPS-for-celphone company and have since the company was formed. If you have any questions about GPS, AGPS and how they relate to phones I'd be glad to answer.
The MPX220 works just fine with a bluetooth GPS. I'm using it right now with a NavMan unit, running betas of the TomTom and MS Mapobjects programs. It won't be too long before there are publically available navigation/mapping tools (and games) available on the Smartphone 2003 platform that will use the bluetooth GPS's.
Motorola is a little behind the times with GPS implementation in their non-IDEN phones. It would have been sweet indeed to see one in the 220 or the straight MPX coming out later this year. If they use AGPS (instead of GPS) the battery life problems aren't an issue, either. The cost used to be pretty insane, yes... but that's changed a lot too.