Is it possible to use GPS off of wifi tether?

I don't know it this would technically work, but here's the situation:

I have a Droid 4 (main phone) and a Droid 2 (DroidTouch).
The Droid 2 has the extended battery, letting me use it for almost 3x as long as the 4, especially when it comes to GPS usage. So, I would like to see if it is possible to somehow run the Droid 2 as my GPS unit in some way (via Droid 4 connection or as standalone if possible)? I don't know how GPS in phones work. I don't see why they couldn't be used as GPS devices without the use of data (see: MotoActv or most GPS watches), but I am assuming it probably doesn't work that way (would be awesome though).

*Both phones are rooted, if that helps.

Edit: I know that I will not be able to stream maps for route navigation. I am interested in this for when i go running/cycling.

I recently backed a kickstarter project called the Pebble Smartwatch and it can receive data from the phone via bluetooth to display different features, one of them being GPS for running/cycling/other sports. While I do not use navigation much, I would use the GPS often and being able to do that with a smartphone not using data would be amazing.

The GPS works regardless of having a data connection or not. It works just like a stand-alone GPS device. However....unlike a stand-alone GPS, there is no Map data on the phone. The only way to get map data is to either buy an offline map app (Co-Pilot has been mentioned in other threads) or having a data connection to the internet so that Google Maps can download the data as your GPS tells it where you are. Tethering your Droid2 to the Droid4 would work for the data connection and the GPS in the Droid2 would work without issues.

Luckily.....Google Maps are going "off-line" very soon....allowing you to pre-download your destination/travel area while on WiFi at home and then just use the GPS without having to worry about a data connection (3G/4G/Wi-Fi or tether).

Awesome! So using it with something like RunKeeper would be fine then? If so many of my worries with the Droid 4 battery life with my active lifestyle will be wiped away (though I have barely touched it since taking it off the charger (2 hours ago) and the battery has already gone done a lot.

First I'd do some bloatware freezing on the Droid 4. Freezing a lot of that can improve battery life tremendously. I pop mine off the charger at 6:30 AM and it goes back on at around 11:00pm (or later) and still in the green. Plenty of use out of it too (normal use...nothing extreme like watching videos all day). Also check any apps that constantly check for updates and see if you can set longer polling times or set to manually check (Facebook, weather widgets, etc...) as those will eat battery faster if checking often.

RunKeeper should be fine since it is using GPS to track your movements, not plot where on the map you are.

Sounds good.
What app would you recommend for freezing apps? I had ROMToolbox, but it seemed to me that the app itself (with the varying functions) might use up more energy than the benefits.
Also, have you used any "Battery Fixers" like Juice Defender? What is your view on them?

I use Titanium Backup. Freezing doesn't remove them, it just removes their hook in to the OS so that they aren't seen. So things can't call them to run and you don't see them in your app drawer. Since they are still there, OTA updates still see them for file checking and install. You also get update notifications from the Market...but that's okay.

Not a fan of any of the so called "Battery Fixers". My fix is to use WiFi when available and keep widgets to a minimum. I also have all my data grabbing apps set to long time checks (every 6 hours or never) and do those checks manually (refresh) when I actually use them.

However...I have chargers at home, work and in the car for "just in case" times. If I know I'll be out late....I'll have it on the charger at work a few hours before leaving. At home it goes in the dock/charger every night.