Ovi Maps is free for all Nokia phones with Symbian S60, but navigation requires a license. While walking navigation licenses are free of charge, driving licenses are only free on the most recent phones. You can always view maps including your position, search places and also calculate a route, but you will not get any visual or spoken instructions without a navigation license.
Regarding GPS you seem to have misunderstood things.
First of all GPS is a one-way communication system - the satellites send a signal and your phone receives it. This signal basicly only contains date and time and ephemeris data (i.e. the satellite's position). From this data your phone can calculate it's own position, if it receives signals from at least 3 satellites. That's all what GPS does.
Neither can GPS transmit any map data nor can it give you any navigation instructions nor can your phone talk back to the GPS satellites (which orbit at an altitude of ~12'500 miles - by far outside of your phone's range).
Now Nokia phones generally require a data connection for two reasons:
On the one hand they try to get ephemeris data on the current satellite constellation, which accelerates the reception of GPS signals, as your phone will be told which satellites it can receive and so for which satellites to look for. That's called AGPS (assisted GPS).
AGPS can be disabled in the settings of all Nokia phones, which I've seen so far. Actually this option is not in Ovi Maps, but in the general settings of the phone (in the Nokia 6110 Navigator this can be found under
Menu > Settings > Phone Settings > General > Positioning > Positioning Methods - ask Google if you can't find that menu in your Nokia).
However without AGPS it will take longer until your phone receives enough GPS satellites in order to determine it's position.
On the other hand Nokia phones require a data connection in order to get map data from Nokia's map server. However you can download the map data for any country with Ovi Suite through your computer to your phone free of charge as described at the following page:
Nokia Europe - Get new maps for your device
If you have downloaded the map data to your phone Ovi Maps will anyway try to connect in order to update map data and to perform searches in the online database, but you can deny data connections, so Ovi Maps will not connect and it will still work flawlessly (if you have downloaded the map data through Ovi Suite as described in the link above).
So if you disable AGPS and if you download the map data of the region you're staying in, you don't need a data connection to use GPS navigation, however the satellite fixing (the time your phone is searching for GPS signals) may take significantly longer (up to 10 minutes in the worst case) and you won't get the latest map data from Nokia's map server.
Map quality is generally as in any other navigation device. There are only two global providers for navigable map data, Navteq and TeleAtlas, which were acquired by Nokia (Navteq) and TomTom (TeleAtlas) in 2007. All manufacturers buy map data from them, even Google does (zoom in in Google maps until you see roads and you will see "Map data ©2010 TeleAtlas").
As a former investor in TeleAtlas I can tell you that there's no general difference in quality between Navteq's and TeleAtlas' data, but of course one of them is always the first to update some new road. So you may always find one of them being more up-to-date in certain places.
The point is from when the map data on your navigation device dates. This is Nokia's big advantage, as they own Navteq and so their map database is always the most recent one. So if you regularly update the map data on your Nokia phone, you'll probably get the best map quality available in the market.
Btw not all navigation devices are sold with free lifetime map updates. Some don't include map updates at all an others only come with eligibility to one free update within a certain time span after purchase.
So that's an important point to look at if you buy a navigation device.