I have note seen the code but the definition of

http://en.wikipedia.org/wiki/Centroid is probibly used.

They are referring to the average coordinate but not in a "flat earth" version but in the real sphere(oblate spheroid) version. There is no reason to give the equator and prime meridian any special status. With caches logged in Europa, Asia and the Americas you can get the centroid on the north pole

The calculation are not done in 3D space but in 2D.The coordinates space is the surface of the earth so you example will be on the surface of Greenland

You can never calculate with coordinates on earth as if they are on a flat surface(if the distance is not very small). One big problem is that one degree longitude is 111.320 km at the equator and 0 km at the pole.

On the earth, the sum of the angles of a triangle is not equal to 180°. se

http://en.wikipedia.org/wiki/Non-Euclidean_geometry
The interesting case it when two caches are logged on that are on antipodes. Like on on the north pole and on the south pole. The centroid quite hard to define but is probity a circle around the earth in this case the equator.