One of the earlist examples of a true guidance system is that used in the German V-1 during WW2. This system consisted of a simple gyroscope to maintain heading, an airspeed sensor to estimate flight time, an altimeter to maintain altitude, and other redundant systems.
A guidance system has 3 major sub-sections: Inputs, Processing, and Outputs. The input section includes sensors, course data, radio and satellite links, and other information sources. The processing section, composed of one or more CPU's, integrates this data and determines what actions if any are necessary to maintain or achieve a proper heading. This is then fed to the outputs which can directly effect the systems course. The outputs may be turbines, reactor conrol rods, fuel pumps, ailerons, or other devices.
Long Range Navigation (LORAN) - This was the predecessor of GPS and was (and to an extent still is) used primarily in commercial sea transportation. The system works by triangulating the ships position based on directional reference to known transmitters.
Global Positioning System (GPS) - This system of satelites provides extremely accurate position information. The recievers position is triangulated using satellites in known orbits. Commercial recievers are limited in how accurately they may provide position data as well as the maximum velocity at which they may oerate. This is to prevent their use in manufacturing weapons.
Laser Designation - This form of guidance is used exclusively for military munitions. A laser designator device spots an encoded laser on the target. This spot provides reference information to an incoming munition that allows it to make in flight corrections to its trajectory. The use of an encoded signal reduces the threat of jamming as well as reducing interference in high noise combat environments. The primary limitation on this device is that it requires a Line Of Sight to the target from both the munition and the designator. More advanced systems use the laser to designate a target, which is acquired by an orbiting satellite that then feeds GPS target data to a launch facility. This allows potential targets to be designated long before operations commence as well as elimiating the line-of-sight requirement for the munition.
Optically Guided - Another form of guidance used almsot exclusively for military purposes, Optically Guided Missiles use stored images of the terrain they are to fly over and an external sensor to track their current position. This guidance system was extremely expensive and not suitable for use in small payload operations. These were used on cruise missiles before the advent of GPS, which is both cheaper and more accurate. The cost of these is high due to the on board processing needed to check the current location against the course data. At the time processors capable of this were very expensive, although similar processing power is available in embedded architectures today. Although called optically guided, most designs used infrared, ultraviolet, or radar images. The visible spectrum suffers from relatively poor clarity and high interference.