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We have an iPhone4 and replaced it with a iPhone5s. In the process of setting up iCloud we registered both of these devices. Now that the phone number has been transferred to the new iPhone 5s, the old iPhone4 only has WiFi and no cell data plan. However, on Find my iPhone in iCloud it still shows the iPhone4 has been updated a minute ago and the location is correct as it is sitting in our house.

Is the GPS in the iPhone4 sending data of it's location via WiFi?

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Yes, the device can communicate with Find my iPhone over Wi-Fi. Find my iPhone uses the currently available network connection, regardless of whether that be Wi-Fi or cellular. The GPS is still used to obtain location information along with Wi-Fi data and the location is sent over Wi-Fi to Find my iPhone.

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