In the years past, it would have been an impossibility to trace the location of a mobile phone; you would have been wasting your time. If it were a land line, it could have been a worthy venture but with mobile phones, it is a hard venture.
Today, the reverse is the case. You can trace a mobile phone's location with ease given the technological improvements that have happened to our world. Just after the September 11 attack, it became necessary for the authorities to be able to track where a mobile phone is making a call. Land phones do not have a problem with tracking because they are stationary but mobile phones are mobile and that means you have to move with it if you will track it.
The solution to this is the technology called Triangulation. Cell phones are designed in such a way that they will send "pings" to the nearest network masts to indicate their presence there. The moment a mobile phone moves into a new arena with new masts, it sends this pings to say, "I am here and I may want to make a call anytime so be there to process the calls".
The cell phone will send pings to every mast in its vicinity so far it can pick network from it but triangulation is done with the nearest two masts which is known by the strength of the signal. The third point is the phone itself. The triangulation is done with these three points.
Someone who is making a cell phone call from a particular location will be traced with triangulation. Although the exact potion of the person may not be ascertained because the said mobile phone caller may be on the move, but the city, street or even the block may be known i.e. we will have a range. A further probe will make it easier for us to track the person.
Apart from this technique used by the cell phone companies, Google Latitude is one way of knowing where your friends are. So far they are Latitude users as well as you are, you can actually tell where they slept last night, where they are right now so far they are with their cell phones!
This one however, may only serve the purposes of those you know and if you will need info on a mobile phone that you don't know the owner, then latitude may not work for you. You will need other service which may require a token fee for you to make a precise trace on the location of a phone.