Can I use an iPhone with no service for iOS development? Will an iPhone with no service plan be usable as a development device?

I don't need any functionality except a working device running iOS that is a GPS receiver. Since GPS is passive, I would think it would still work without a service plan.

Unless iPhones get locked down or something, which is why I ask.
You should be able to use an iPhone with no service for development purposes.

There seemed to be a problem with this in the past due to the activation screen showing up, but there was a workaround even back then. I don't think Apple wants to force you into a $70 contract just for development purposes. One of the workarounds mentioned was to develop on an iPod Touch (if you don't need GPS functionality), but the others specifically mention how to bypass the activation screen on an iPhone.