Luckily, Loopt has managed to jump through flaming hoops of app approval fire to offer this background notifications functionality on the iPhone, despite its inherent restrictions. Even when not actively running the Loopt application, you'll be able to take advantage of the Always-On Location Service, they announced on their blog today.
It's not revealed how exactly Loopt is going to be able to achieve this feat from a developer standpoint, but somehow it will be allowed to keep a back door open to Loopt's servers and constantly update your location information in the background.
With the new Always-On feature, you'll be able to get notifications when a friend is nearby, even without having to open the Loopt app as you currently have to do. The caveat? It will cost you $3.99 per month via AT&T for you to do so.
The other catch is that for now, the Always-On Location Service will only be rolling out to 5000 users in an invitation-only trial. Head over to Loopt to sign up for a chance at an invite, and if you're admitted to the trial you can apparently take advantage of some friend nepotism by emailing Loopt to get some of your cohorts in on the beta as well.