This is an excellent idea! As a matter of fact, there are a handful of companies trying to provide location based services on the cell phone. You might want to google it if interested. Also see this article for example.

This type of service is already deployed in Europe and Asia where mobile services and infrastructure are ahead of US. I believe that the slow adoption in US is a combo of billing (ie flat and low cost billing in Europe/Asia), culture (public transportation and free time), etc.

Count me out on this one! Cell phone already too invasive for my taste!

The field is called "presence detection" and is at the basis for "push to talk" services like Nextel's has had for many years, and Verizon's new competitive offering. Read "Wireless Week" for the last two years.

Why pay carriers for IM services at all? Why not make a texting device over CB or FRS radio frequencies combined with an a circa 1973 IMP so the more people who have devices, the stronger the buddy network.

There's a privacy problem here. Letting users know their own location is one thing but, in the UK at least, I'm pretty sure the mobile phone companies aren't allowed to keep, let alone disseminate, users' location info.