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A new True GPS Fix and 06.15.00 Baseband downgrade with Redsn0w has been released: Click here.
This is a tutorial for those who are really wanting GPS back on their iPhone 3GS after jailbreaking and upgrading to the baseband that has crippled it. Unfortunately you cannot get it back in an original state at this point in time. However! There is a workaround. What you will need is an app called BTstack (or something similar) and a Bluetooth GPS logger. I can assure you that BTstack works on iOS4 and iOS5. You can try eBay or Amazon, they should range between $30 - $100. I have the Holux M-1200E model and it works great. I generally use it for geotagging my DSLR photos but and this gives it another purpose.
For those who think that I am trying to claim that this is bring your GPS back to your iPhone like it was before 06.15.00. Please read this. A 'workaround' can be defined as: "A method for overcoming a problem or limitation in a program or system" (Oxford 2009). The 'problem' is no GPS fix, the 'limitation' is 06.15.00. Overcoming this is done by 'program' BTstack GPS and 'system/s' in this case is the iPhone / GPS logger. The workaround is actually better (more accurate).You can download GPS Status App (Free) to troubleshoot GPS problems.
For compatibility of Bluetooth GPS loggers look here. The iPhone 3G (not 3GS) baseband can be exploited to downgrade from 06.15.00 using fuzzyband, if you are lucky and have bootloader 5.8. Which will allow you to install an official iOS from apple and bring your iPhone GPS back. I will save you some time by saying do not bother trying to find a cracked version of BTstack GPS. Because you will not find it. I have created a Facebook Group for all those wanting to troubleshoot and find solutions to downgrade the baseband of 06.15.00 and restore GPS functionality or offical iOS.
This is Option 1.
Option 2: Get a new baseband processor ~$100*
Option 3: Get a new iPhone ~$800
Option 4: Get a secondhand iPhone $100 - 600
Option 5: Get over it and begin on living Priceless
Option 6: Wait until the Dev-Team or Chronic Dev Team makes a breakthru....
Option 7: Wait until the iPhone 3GS Baseband goes past 06.15
Option 8: Buy a car GPS