From the Garmin website:
Sources of GPS signal errors
Factors that can degrade the GPS signal and thus affect accuracy include the following:
Ionosphere and troposphere delays - The satellite signal slows as it passes through the atmosphere. The GPS system uses a built-in model that calculates an average amount of delay to partially correct for this type of error.
Signal multipath - This occurs when the GPS signal is reflected off objects such as tall buildings or large rock surfaces before it reaches the receiver. This increases the travel time of the signal, thereby causing errors.
Receiver clock errors - A receiver's built-in clock is not as accurate as the atomic clocks onboard the GPS satellites. Therefore, it may have very slight timing errors.
Orbital errors - Also known as ephemeris errors, these are inaccuracies of the satellite's reported location.
Number of satellites visible - The more satellites a GPS receiver can "see," the better the accuracy. Buildings, terrain, electronic interference, or sometimes even dense foliage can block signal reception, causing position errors or possibly no position reading at all.
GPS units typically will not work indoors, underwater or underground.
Satellite geometry/shading - This refers to the relative position of the satellites at any given time. Ideal satellite geometry exists when the satellites are located at wide angles relative to each other. Poor geometry results when the satellites are located in a line or in a tight grouping.
Intentional degradation of the satellite signal - Selective Availability (SA) is an intentional degradation of the signal once imposed by the U.S. Department of Defense. SA was intended to prevent military adversaries from using the highly accurate GPS signals. The government turned off SA in May 2000, which significantly improved the accuracy of civilian GPS receivers.
John