This change would likely give application developers and advertisers access to user data they have not previously had. One key beneficiary of the change is Apple itself. With the new iAd platform rolling out, having more leeway in how user location data is used could make targeted ads more effective.
Many of these privacy changes tend to get blown out of proportion. After all, is this much different than what Google does? Our real concern here is the lack of detail Apple goes into regarding just who would have access to the data, and how long it would be retained. We know from the past AOL search data leak and Netflix records that it is possible to identify people in anonymous data. Does this new policy concern you?