For phones there is a setting to use "network provided values" which comes from the cell towers. I don't know if it is on by default, but my phone has been that way as long as I can remember.

On Android devices with only wifi there is no automatic setting. I discovered my Galaxy Tab was drifting as I once had all my devices set to sound an alarm at once (I really had to wake up at that time). Unfortunately Android doesn't make it easy to keep your time in sync. There is a good app called ClockSync that implements NTP but that only works on rooted devices. Its stats say my clock was drifting by 3.5 seconds per day! If you don't have root then you have to change the time manually with the app guiding you. Quite why Google can't implement NTP I don't know.

But guess where the cell tower gets it time from—yep, GPS. Quick research shows CDMA2000 (at least) uses GPS time (probably, they didn't want to deal with leap seconds).

Yes, they do. Unfortunately, the time my (GSM) operator sends is off by 2 minutes when I compare it to GPS data or the NTP synced clock on any desktop. So this feature is not very useful and I will be very happy if I see NTP sync in a future Android version.

This is a known (Android?) bug apparently, have had Vodafone here in NL confirm it. They don't know what it is either... I've had drifts of up to 4 minutes.