The Global Positioning System has revolutionized how we keep ourselves from getting lost on the way from Point A to Point B. Not getting lost is equally important for spacecraft, and the best method of space localization might be to use a System based on Pulsars throughout the Galaxy. Hmm, how about we just call it "GPS" for short.
Using pulsars as navigational beacons is a very old idea. In fact, space buffs might recognize this image:
It's a metal plaque that was included on the Pioneer 10 and 11 spacecraft, the first human-made objects to leave our solar system for interstellar space. A variation on this image was also included on the Voyager spacecraft. The intention was that if aliens ever stumbled onto any of the probes (likely very far in the future), they'd be able to figure out where the spacecraft came from, and to do that, they'd need a map.
The map on the Pioneer plaque isn't the bit along the bottom with the planets: it's the thing left of center with all the radiating lines. Each one of those lines represents the direction and distance from the Earth to a specific pulsar relative to the center of the galaxy, and each pulsar is identified by its period, which is the thing that makes pulsars such valuable navigational tools.
Pulsars are extremely magnetic neutron stars that fire powerful beams of electromagnetic radiation from their poles. As the stars rotate, these beams sweep around in a circle, and from the perspective of far off planets like Earth, we see pulsars like lighthouses. The x-ray beams flash on and off with a period that depends on how fast the pulsar is rotating, and since each pulsar has a unique rotation speed, they're easy to uniquely identify from very, very far away. And, by plotting the direction to three or more of them at once, you can triangulate your location anywhere in the galaxy.
The new bit here is the concept of sticking pulsar telescopes on operational spacecraft to use the stars as a positioning system. To make this work, German scientists are looking for ways to miniaturize X-ray telescopes to create a practical pulsar navigation unit, which will probably take them 15 to 20 years. But once they get it figured out, it'll enable probes to plot their position with an accuracy of about three miles virtually anywhere in the galaxy.
Current systems, by contrast, rely on radio receivers on Earth to help them guess their position, which means an error on the order of six miles out by Mars. It doesn't sound like much of a difference, but as we get farther and farther from Earth and expand out into the galaxy it'll become critically important to know where we are.