I just now tested this on my iPad2 with "Location Services" turned off.  It gave me the warning at start up about requiring GPS to function properly.   But when I went into "Menu => About => Connected Devices" and select "Wifi Device => SkyGuard", it hooked up just fine, and now I have traffic and ownship position.  So it seems to be working OK.  Hopefully, it'll work equally well for you.