Does the speed sensor need to be connected in order for the navigation to work? The navi on my D3 does know where I am at, doesnt move when i drive.. What all needs to be connected in order for this to work? Thanks.

No, the GPS antenna is all you need for the GPS system to triangulate your location.

hmm ok. i do have the GPS antenna hooked up and it still does not know where i am.. Is there some kind of setting i need to put it on to find where I am? Any ideas?

Try hard resetting the unit. If you got it used it would probably need a reset and a new home location set. If it's not that then your antenna could be broken.