There is no built-in functionality for this. The only thing that's built-in that I can think of is the "locate my phone" feature that lets you log into www.live.com and track the location of your phone (useful if you lose it or it gets stolen). However, if you want to share your location with your friends, you will have to use an app and external service for this.
You mention Google Latitude. Although Google doesn't currently have an official Google Latitude client for Windows Phone (or really, much of an app for anything on Windows Phone...), there are third-party options. One that I'm particularly fond of is gMaps (or its ad-supported free version). There are other clients as well, such as Latitude Auto-Update and Latitude for WP7.
If you are on AT&T, there is the AT&T Family Map service. There are also other apps that have their own spin on finding people by tracking their location, like Who's Near Me LIVE.
In all, you'll have to find an app to do what you want to do. Windows Phone doesn't support this as built-in functionality, at this time.