Frustrating! I have GPS on on my phone. When I'm home/at work, my clock widget seems to show the correct city (well, close enough--it's the next town over), but the time is off by an hour. I'm fairly certain that this is because the Clock thinks that I'm in Lincoln, Nebraska rather than Lincoln, Rhode Island. That'd explain why it's an hour off. I've gone into Clock, then in World Clock gone to Add City and searched for Lincoln, and only the one in Nebraska shows up, so to me this sort of confirms what I think is wrong.
I have the Date/Time set to Automatic so it picks it up from the network. The date and time on the lock screen and on the taskbar are both correct. So I don't really *need* the clock widget, but I like the flippy clock with the weather built in!
This seems to be either Sprint or Hero specific, as I have 2 friends with HTC phones (not sure what networks they're on) that get the right time when they're in Lincoln. I'm pretty sure this only started happening around Dec. 21st or so. I think GPS used to correctly pinpoint my location, but around then it started showing the next town over rather than the one I was actually in.