The power consumption of the GPS add-on device should be around 1% of the power drawn by current GPS devices, with only 1mA drawn when continuously tracking.
Companies might be missing a trick here, but shouldn't it be possible to mount such a low power (and presumably small) device inside a memory card such as an SD card? How much of a CPU would be required to monitor the contents of the card? It would have to notice when a new JPEG file appears in the storage, do a GPS geolocation check and modify the EXIF data of the JPEG. I reckon that all of this could easily be fitted inside an SD card or a Sony Memory Stick. It would sell like hot cakes too.