You only need the wi-fi connection for the Bad Elf GPS for updates (or any other update for that matter), other than that the Bad Elf GPS is a great add on to an iDevice that doesnt have a built in GPS chip. We first started using it with my daughters iTouch, then on my Gen 1 iPad. Since I also have a Mi-Fi, I didt see the need to spend the extra $ for the GPS/Cell version of the iPad, and wont when I get a newer one later this year.
The newer GPS chips that are in the iPads and iPhone4 are much better for accuracy. I never found that my iPhone 3s was that accurate, but people swear it is. GPS chips in phones are still aGPS which uses a cell signal to get a location quicker, then converts over to GPS. That may be why they arent rated to fly by. The Bad Elf GPS is rated to fly with, so I would guess its good enough to sail by.
FWIW - I use the Navonics app. Its loaded on my iPad, and my iPhone. I also have tried the iSailor app, I am still out on that one. I want to try the PolarNavy app when I upgrade to a iPad gen 3.