Loopt has made a deal with AT&T to track and update the location of your iPhone even when the Loopt application isn’t running. This does not mean that the application is running in the background, instead AT&T’s servers will communicate with Loopt to update your location.
The service is not free, there is an additional $3.99 per month charge to your AT&T bill. But, the first 14 days of the service is free.
This deal is the first of its kind and opens the doors to other services to make similar deals with AT&T and other carriers. Whether or not the service will be successful remains to be seen.