Argot (pronounced 'are-go) is an Android application that allows you to bookmark locations using GPS. The bookmarks can then be organized and used for small-scale navigation (e.g. finding your car in a parking lot, or marking a meetup location in an unfamiliar neighborhood).
An advanced pay version is being developed that will add access to maps, the ability to send and receive bookmarks, bookmark tagging and filtering by tags, and with more informative navigation graphics.
The bookmark list
The bookmark list can be sorted by either the bookmark name, the bookmark's proximity to your current location, or the date and time that the bookmark was created. Measurements can be displayed in either metric or English units.
The navigation screen displays the direction and distance of the bookmarked location, along with the accuracy of the GPS signal of both the bookmark (when it was saved) and your current location.
This is an issue with any application, such as basic compass apps, that relies on the phone's magnetic field sensor. The YouTube video Best Compass Calibration Method (iPhone/G1/etc.) provides simple instructions on how to calibrate that sensor in your phone.