This problem was driving me absolutely crazy, and i kept reporting it in every 2.2 release i tried! But NO ONE else was having the same problem... hahaha.. you all must have thought i was trolling...

Seems as though my problem was specific to my carrier. Hopefully this will help anyone else having issues with network location on any 2.2 firmware and using Rogers network

[SOLVED] Google Cell Tower Location Services not working on Rogers with Froyo 2.2 - xda-developers
thanks to all the devs who make 2.2 possible on Spica.