I think you have misunderstood what "assisted GPS" means. The "assisted" part means that the device first uses it's cellphone signal (or wifi) to make a rough estimate as to where it is. It uses this information to reduce the time it takes to get a fix with the regular GPS signal - i.e., the cellphone/wifi assists the GPS. Without this assistance it can take much longer to get a lock.
Both types of iPad can use location-based services, but only the device with a SIM card has an actual GPS module. The wifi-only device can take a guess at where it is, based on the wifi SSIDs it can see - Apple knows where these are, from other users devices that also had a GPS and reported it previously - or by using a database similar to http://www.hostip.info/
http://gps.about.com/od/accessories/a/New-Ipad-Gps.htm