I have to admit, I have no idea how GPS works. I've often wondered if it just tracks on a horizontal basis (A to B) or if it considers gradients as well. But it has to consider gradients because my Garmin tells me elevation gain + loss, as well as a graph displaying that info: 
However, I never trust the accuracy completely, especially when I go off trail or when there's trees, buildings, or hills obstructing the GPS connection.
It'd be great to hear from someone who actually knows how GPS works.
Anyone know if this measures the vertical distance as well as the presumed horizontal? A friend of mine measured a fairly hilly run, and I'm wondering if it measured just using horizontals thereby giving a shorter distance...
If I run/walk from A to C, does GPS measure AC or AB ?