June 17, 2013
The solution is to log in on an android device and check the box to enable latitude from either google maps or google+, then as if by magic your friends reappear on your good old iPhone latitude app.
Note - Google will fix this for iPhone users, but really, we are not a top priority. It will happen at some point with a google maps or google+ app update.
So you don't have an android device, how to fix this NOW!
1) Download and install the free Bluestacks Android emulator: http://www.bluestacks.com/
2) Start it up and search for the google maps app.
3) You will have to sign in to google play to download the free apps. Once that is done, load it up.
4) Click on the latitude icon and then enable everything.
5) Look at your iPhone latitude apps and all your friends are back!
6) Relax and enjoy all your friends, family, colleagues and security agencies tracking your every move.
Hope this helps.
KUDOS to Jason Harris for being the original person to figure this workaround out. I tried Jason's method using AndroVM but oddly it didn't work for me, but tweaking the proceed to use the bluestacks app did.
Original method - http://productforums.google.com/forum/#!topic/maps/a2hPv1iPnvM%5B1-25-false%5D