Yeah for me it's overlay in the maps app or bust. I liked opening google maps and seeing all my friends and family. The option to share only city-level location was enough to assuage any feelings of creepiness. And I know I'm on the fringe here, but I was also quite partial to the fact that it had an API.
I made the same complaint to a Googler friend - but he showed me his copy of Maps complete with contact's locations. I assumed it would be coming soon in a future update, but this was more than a year ago.
Sorry, I think you missed the context from the parent post.
This is just the same as the Location tab in Google+ (which used to be a separate app, Latitude) - it's only contacts who have chosen to share their location, but integrated into Maps.
