Receiver & Basemap Accuracy
While GPS receivers have become much more accurate over the last couple of years, they still need line-of-sight to lock onto satellites---this means reduced accuracy anywhere the sky is blocked by obstructions like skyscrapers or canyon walls. Also, basemaps need to be periodically updated or they can diverge significantly from reality, especially in rapidly changing areas.
Local Knowledge
Sole reliance on a GPS receiver's directions is another possible disadvantage of GPS systems. Relying on a GPS to plot your route instead of deciding where to go through gathering information from local sources---like the web, or locals---can lead to significant errors in judgment as the driver blindly follows the GPS. For instance, a GPS route won't reveal if a stretch of road has great views, is closed for the day or is potentially hazardous to drive through at certain hours---but stopping and asking directions at a gas station might.
Potential Hazards
Another disadvantage of using a GPS system while driving is obvious to anyone who has sat in the passenger seat while the driver fiddles with the unit's screen. There's always a temptation to key in data while driving, and dividing attention between the road and the GPS is a recipe for disaster; in fact, most GPS receivers display a screen on startup that warns against key operation while driving (though some new units in 2009 come equipped with voice command recognition software, which practically nullifies this problem).
