GSM phones can be "tracked". That is, the cell in which the phone is current "registered" can be ascertained quite easily. Indeed, there are several companies that already provide this service. I'm not sure about those crazy-ass 80's style analogues systems you have in the US though.
Now, having said that, there are not many countries where law enforcement have systems and procedures in place to do this. I do believe the US Federal authorities have mandated that all phones be trackable for 911 purposes.
It should also be noted that GSM tracking is only as accurate as the cell size. This can be accurate up to 100m or as low as 10km (depending again upon the cell size). It's more accurate in urban areas. Furthermore, GSM phones can be tracked whenever they are turned on. You do NOT have to be "transmitting".
There is a whole raft of so-called Location Based Services (LBS) being developed and offered by cellphone companies. These sometimes rely upon GPS, sometimes GSM and sometimes even RFID. It's an interesting topic and an area where much progress is being made. Soon you won't be as anonymous as you may think.
Mr Mephisto