[tphone]

I have used the GPS while the phone was in 'airplane' mode. On an airplane, and on a cruise ship off the coast of Baja. So I know for a fact it works. You will get a faster lock if you have recently run quickgps, otherwise you will have to wait while the ephemeris data is downloaded from the satellite, which could take a while.
All this is assuming you have a stand-alone (not network based) gps program and you've set up your device properly.