The GPS system is often wrong, sometimes by as much as a few hundred yards, but usually just a few. It most often happens some time after it has been powered up, when the almanac data (which is loaded when the first fix is made with satellites, and provides the local GPS system with information about where the nearest satellites are and will be) is getting old. It can also be fooled by the physical environment around the vehicle – driving in urban canyons, between large buildings, the signal from the satellites can be deflected off the surroundings, which have a small but significant impact on the timings that the GPS system uses to determine position. Thick vegetation can also play a deleterious role.
A good sat-nav system, however, will smooth out such ‘jitter’ as it presumes that the vehicle is on a road, following the route programmed into it. You can see this by deviating from the route – for the first few yards off the set route it will show your position to be where you should be, rather than where you are, as it presumes jitter is occurring until the deviation is such that it assumes you’re no longer following the route.