For those of you who have played TES 4: Oblivion, think of the compass used in that game. The arrows on it could point to where you have placed land-claim flags which Notch already plans to implement. Though, flags not owned by you or your comrades shouldn't appear on your compass. Perhaps foreign ones would be added once you were near enough, or used them? I like the idea of trekking through the desert to find some city, and adding to to your "map" to use for later reference. Though this would be rather troublesome on multiplayer maps, I'd imagine.
EDIT: I hadn't read Notch's "There could be NPC villages and monster towns." comment.