Yesterday at Yahoo’s research headquarters in San Francisco, the company announced that it publicly opened Fire Eagle, its management system for location data. Previously, the service, which shuttles your location from your iPhone, say, to a microblogging service like Pownce, was only available to invited participants. Now that most of the kinks have been worked out, said Tom Coates, head of products at Yahoo Brickhouse, in San Francisco, Fire Eagle is ready for anyone to use.

With Fire Eagle, Coates and Yahoo are betting that location-aware technology is going to be big. The sort of future that Coates envisions is one in which your location can be broadcast to any website, added to your blog, and used to help you search for friends, news, and shopping deals nearby–all with your permission, of course. Fire Eagle, Coates said yesterday, can be the single place that a person needs to visit to set privacy requirements and make sure that the right type of location information (exact address, neighborhood, city, state, and country) is being displayed where you want it.

Here’s how it works: if you go directly to the Fire Eagle site, you can manually set your location; if your computer, cell phone, or GPS navigation unit can find your position, you can have these gadgets send that data automatically to Fire Eagle. When Fire Eagle gets your location, it doesn’t do anything with it until you select the Web services to which you want that information sent. For instance, if you have it sent to Pownce, Fire Eagle will update your location in your activity stream. If you allow Fire Eagle to send your location to a service called Radar, it can show you news stories that occur within 1,000 feet of your position. And there are a handful of services that can use your location information to help you see which friends (who also use the services) are nearby.

If these applications don’t completely impress you, you aren’t alone. Even at the Yahoo event, the people I talked to, mostly programmers and early adopters, weren’t blown away by the demonstrations. The consensus is that the killer location application simply hasn’t been invented yet. And only when that happens will location-aware technology truly take off.

In the meantime, Fire Eagle is playing an important role. Yahoo is offering a programming interface that lets software engineers easily integrate Fire Eagle into their existing service so that they don’t need to build a location system on their own. Essentially, the services are bypassing months of work that it would take engineers to find the best way to read all the different forms of incoming location data (from GPS, Wi-Fi signals, cell-phone tower triangulation) and parse it themselves. Since Fire Eagle makes it easier for programmers to add location features to their software, this means that there will be more location-aware applications, and a better chance that truly useful ones will arrive soon.

Fire Eagle is good for users too. If you’re interested in using any of these emerging location-aware services, you don’t need to update each one independently: Fire Eagle will automatically send out the updates, based on your specifications.

Knowing that location-aware technology is a privacy minefield, Coates explained yesterday the three Fire Eagle features that his team has developed to give you a sense of control. First, you may choose to set the granularity of your location, ranging from your address to your country. Second, you can, at any time, “hide” yourself, meaning that your location data comes in to Fire Eagle but does not go out to any of your applications. Third, you may purge your data whenever you want. Fire Eagle does not keep a record of your locations; instead, it only stores your current position. The problem arises, however, with the applications that publish your location: they may keep your data as long as their terms of service allow. So even by purging your data from Fire Eagle, the trail you’ve left on the Web will still be visible.