Currently been using my phone and my tracks to record rides and comparing it to my cycle computer. On the whole they agree but the phone occasionally does odd things like jump miles off the route and then back on. Which unsurprisinginly effects the speeds and distances recorded.

If i were to get a dedicated gps such as the Garmin 500 do they exhibit any such behaviour? Does the speed sensor correct this sort of thing?

Lots better, have a look at the route I posted up before in G+ select the aerial view and zoom in on it on the southernmost part, you’ll see its pretty much spot on despite some really heavy tree cover for a part of the route. I use a Garmin 800.

Most phones that have this app use the telphone masts in the area to locate your postion, through triangulation. If the phone looses signal from one mast the phones acuarracy is compromised.
the same happens with GPS based systems. The more satelites they can triangulate off of the more accurate a position they give you.
GPS based systems are effected by weather, especially thick cloud cover. This slows down the signal to the unit which will affect location, mapping, speed etc.
the 500 does come with a wheel based sensor so it uses the best of both systems. hope this helps :0)

Worth looking at the Bryton range, similar set of features to the Garmins but at a different price point.

Oh and DC Rainmaker for in depth Garmin reviews

http://www.dcrainmaker.com/2009/11/garmin-edge-500-in-depth-review.html