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The location-based social networking application Loopt has definitely been one of my favorite early iPhone apps — at least in promise. I say that because when it works, it works great, but many users have been having issues with its location functionality. The service rolled out an update tonight to address this as well as the recent issue it’s had with sending out notices to your phone’s contact list.

I talked with Loopt chief executive Sam Altman via email about some of the issues myself and others had been having with the location finding functionality, and told me it was a GPS issue on the iPhone 3G. Altman says that with tonight’s update, the service should be “way better,” and upon testing it myself, I’m certain he’s correct.

Previously, Loopt could only locate me sporadically. Most of the time the app was stuck in the “Locating” process. In testing the new update for the couple hours walking around, it’s been able to pinpoint me everytime.

Altman declined to specify what the company did to rectify the issues it was having.

The other major issue that got Loopt in the news the past couple of days involved troubling privacy issues regarding how Loopt utilized your phone’s contact list. Due to some tricky wording and user interface choices, users were inadvertantly sending out location updates to users’ entire address books. Just because someone is in your address book, you may not want them knowing where you are at all times, as blogger Justine Ezarik pointed out.

Altman weighed in on the issue on the Loopt blog a couple days ago, apologizing for the confusion and taking the blame for the feature. Tonight’s update fixes the issue, promising “a clearer friend invite flow which makes it more explicit which friends you are inviting.”

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