Just to throw a little more fuel on this fire - GPS altitude is in
widespread use in the soaring world and has proven to be very useful
for computing height above ground and final glides to destinations.
It can also be used to give vertical motion, although not as
accurately as a pressure instrument.

The biggest difference (other than the previously discussed pressure
altitude vs height above the ellipsoid issue) is that while an
altimeter, when set to the correct pressure (mb or in hg) for QFE or
QNH, is stable in the short term but will become more innacurate over
time due to atmospheric pressure changes (not talking about flight
levels here), GPS is less accurate in the short term (altitude varies
with geometry, etc) but extremely stable over the long term.

I won't waste my time on argueing with Mxsmanic - he is really
clueless - but it sometimes amazes me how many "real" pilots have a
poor grasp on what altimeters really indicate!

Speaking of accuracy, anybody remember what the altitude tolerance of
an altimeter is? In military jets it's +- 75 feet or so - I have no
idea what it is for the non-TSO'd altimeter in my LS6. Which means
that as long as your GPS is tracking 4+ satellites with good geometry
and no SA, it's altitude (QNH) is probably better than what is shown
on your altimeter (but only if you know the difference between MSL and
HAE, which can be over 100' in many places...).

So - use your altimeter (set correctly) for IFR, and use your aviation
GPS to help avoid hitting the hard stuff!

Kirk