How does find my iPad know the location?

My iPad only has wifi.  At my home, find my iPad will not find the location.  At my son's house, find my iPad works.  my son says it is because find my iPad uses the ip address to find the location; his cable provider supplies the location of the ip address while mine does not.
is he correct?
Further, iPad maps works at my house.  It looks to met at iPad maps uses GPS, wifi, and a compass to fine the location.  Why doesn't find my iPad use similar technology?
Thanks.

iPod touch User Guide (For iOS 4.3 Software)
Free Find My iPhone: Frequently Asked Questions
It uses the registered address of the router to which it is connected to provider the location.
"iPad knows where you are even if you’re not exactly sure yourself. Using GPS over 3G or known Wi-Fi hotspots and a digital compass, iPad puts you on the map."
http://www.apple.com/ipad/built-in-apps/maps.html

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