I think you are talking about Inertial Navigation. The available INS units are quite accurate, but costs a fortune. If you are intrested in location in a closed space other type of system can be used, either ultrasonic or RF based. Please define your objectives.
I have got already thought about this kinda project and had my notes for doing it ...
here is the idea which i documented in my personal blog
Embodiments of the present invention are directed at gathering position information of mobile and stationary entities and using the position information in a wide variety of applications. Various embodiments use a plurality of signal transmitting devices and/or a plurality of signal gathering devices to gather position information. In one embodiment, the signal transmitting device is an existing mobile electronic device. In another embodiment, the signal transmitting device is a radio frequency identification (RFID) tag attached to an entity. In another embodiment, the signal gathering device is a collection of wall mounted antennas. The entity location is calculated by gathering the phase difference or other timing information of signal generated by the signal transmitting device on the entity. This location information is then given to end user applications. One embodiment is a network security application using gathered location information of wireless ethernet cards. Another embodiment is a network resource locator application.