Edited
This is not exactly what Churla27 was referring to. This is using known hot spots to locate you, but its not using your IP so its not the same as tracing you by IP Address which is more involved especially to a house.
Apple quote:
"Find yourself. And what's around you.
You're always in the middle of somewhere. And iPod touch finds exactly where using known Wi-Fi hotspots. If you're trying to make a plan, or a Plan B, it also finds points of interest by keyword: Search for “coffee†and iPod touch shows cafes near you. So you'll get lost only if you really want to."