In order to use Google Latitude from Gmail, you should have enabled Gadgets in Gmail.
Once you have done that, go to the Gadgets tab in Gmail settings.
Give the gadget’s url as http://www.google.com/ig/modules/fv.xml and add.
Now you are set to use Latitude from Gmail. The Latitude gadget appears on the left navigation bar of the Gmail page. When you click on your photo in the gadget, it gets launched in its canvas view (full screen).