The accuracy of the physical location estimates required by a Smart Dust deployment very much depends on the sensed phenomenon and the accuracy requirements of the application. In tracking applications, for example, a location grain size of about the size of the monitored phenomenon is often sufficient. That is, the required accuracy of the location system is fine-grained and ranges from centimeters (for tracking a flying insect) to meters (for tracking a large animal herd).
Note that in a typical deployment, the distance between the base station and dust nodes is in the order of tens of meters. A location system for Smart Dust should provide the desired degree of accuracy even under this condition.