From a Cult of Mac article by John Brownlee:
These are all girls with publicly visible Facebook profiles who have checked into these locations recently using Foursquare. Girls Around Me then shows you a map where all the girls in your area trackable by Foursquare area. If there’s more than one girl at a location, you see the number of girls there in a red bubble. Click on that, and you can see pictures of all the girls who are at that location at any given time. The pictures you are seeing are their social network profile pictures.
I don’t use Location Services unless I’m specifically trying to locate something. I restrict from apps except Find My iPhone.
ETA: FourSquare has responded by blocking the app’s access to the API.
ETA: And the app has been pulled.