Ok this is posted by an Australian.
We have 103 find's to date most done with the iPhone .. I have found a GPS to be more accurate especially when the phone reception is crap (note G3 is better that G4 for country area's at this time)
Towering Inferno ( Warrnambool Australia ) was my GPS / phone challenge the GPS was loaded with the cache straight out of the box no playing with settings and was accurate to 5-8 feet where the iPhone 5 was 5-8 metres.
I have a cache out on a back beach with only 2 find so far and another aborted attempt, phone coverage out there is crap, the first to find used his phone and almost gave up because his phone was all over the place, the aborted attempt gave up because his phone - a different brand to FTF was also all over the place (the other one to find it was with me so I gave him some hints)
I did a trip with 2 other cachers me with the phone and one with a GPS after 6 hours of caching (including an hours travel each way) I had used 80% of my battery and that was not using the phone for most of the find's (13) we had that day but we did use the phone to decide where to go next.
The major Australian phone operators boast that they have 90% coverage - thats based on population i.e. the east coast and major towns & cities, get out in the country and accuracy will drop.
If you are going to be caching in and around town on a nice sunny day your phone will be fine, if you want adventure get a GPS.