I just got back from a two-week visit to Japan, and rented one of these devices. It was the exact same device mentioned in the OP, except I got mine from another vendor, Telecom Square. Their pricing is a bit different, with a lower initial charge but a higher daily charge, so which vendor is cheaper will depend on the your length of stay. Telecom Square has the advantage in that they have rental and dropoff counters at major airports, instead of the link above which apparently ships it to your hotel or a delivery service at the airport. Also, Telecom Square has 24x7 phone tech support in English. But the devices and carriers appear to be identical.
I highly recommend this product, especially for iPhone users. It allows up to 5 WiFi devices to be connected to it at once, so both me and my friend were able to use both our laptops and iPhones at the same time. When not in the hotel room, having iPhone data connectivity without worrying about the international roaming rates was a godsend. On my previous two trips to Japan, I used the iPhone in int'l data roaming mode. On those occasions, I had temporarily signed up for the AT&T int'l data roaming package, and even though it was expensive, having the iPhone with full data capability at all times made a *huge* difference in the convenience of the trip. In the absence of such a device that's mentioned in this thread, I'd advise iPhone users to get the data roaming package - even though it's expensive, it's worth it for the benefits you get.
But with this device, it's even better. The price ends up being much cheaper than the data roaming, it covers multiple users, and will connect your laptop if you're staying in hotels that charge for internet access. Plus, since there's no cap on usage, you don't have to worry about it. Even with biggest data roaming package on the iPhone, you do have to be a bit careful about usage, but not with the WiFi puck.
NickW has already mentioned the biggest downside: the 4 hours of battery life. The easiest thing to do would be to just leave it on all the time, but then it'll last you only a third of the day. It was easy enough to get into the habit of turning it off when I wasn't using it, and only takes a minute or so to initialize when you turn it on.
As far as the GPS goes, I think the OP was asking about the Google Maps feature on the iPhone that tracks your location when in GPS mode but needs a connection to Google to draw the map. Yes, it's more than fast enough for that to work properly, and was one of the major benefits of having Internet access on the go as opposed to just in the hotel room.
The only time it didn't meet my expectation was on the Shinkansen. I had read somewhere online that 3G data doesn't work well on the Shinkansen because you're traveling so fast that the cell-to-cell handoffs happen too quickly for the network to keep up. I found that not to be the problem. Instead, the problem was that the 3G signal drops out every time you go into a tunnel, and takes about 30 seconds to re-acquire once you're out, which on the Sanyo and Tokaido Shinkansen lines, seems to be just enough time to get you to the next tunnel in many cases. Now I can really see the benefits of the uninterrupted WiFi on the N700 Nozomi's on the Tokaido line, and if I were buying a ticket on that route, I'd definitely spring for the extra charge to get Nozomi service.