How does GPS in iPhone 4 & 4S work?

I am an AT&T 2GB data connection subscriber and will be cross-province touring in Quebec, Canada. I am debating on whether to get a portable GPS receiver or use my iPhone to get directions and map layout.
Does the iPhone GPS require data connection to the network provider to get map directions? If data connection is required to obtain maps, what iOS application allows downloading of maps for off-line use by the app to provide mapping directions in conjunction with the GPS?
Thanks.

When the iPhone is activated, an activation fee is charged. None of the iPhone functions work with a new iPhone until the iPhone is activated with AT&T except for being able to place an emergency 911 call.
and what's the one month's service about?
When an iPhone that is purchased at the no-commitment or no-contract price, it is activated with AT&T on a post-paid/monthly billed basis as with an iPhone that is purchased with a two year contract but is on a month to month basis. Service can be cancelled at any time without an an early contract termination fee since there is no contract, but if service is cancelled during the first month or on the next day after the iPhone is activated, you will be billed for one month - for the chosen calling plan and data plan which is required along with the iPhone's activation fee.
http://www.att.com/gen/press-room?pid=18004&cdvn=news&newsarticleid=30863
All new and current iPhone customers who are upgrade eligible, plus existing customers who choose to upgrade early must agree to a two-year term commitment, and select an eligible voice and data plan for iPhone. *No Commitment pricing does not require a two-year term commitment, but does require both voice and data service.*

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