AFAIK you need the "3G" version to get the GPS receiver, but there is no need to put in any SIM card for the GPS to function.
However, I am informed by Apple that without a valid SIM and GPRS/3G data enabled, the time to get a fix is much longer.
Obviously, GPRS/3G won't work when airborne, which is why the Iphone/Ipad GPS is not great, according to many pilots.