Oooh, there's some nasty confusion ahead...
Note that Michael has now started talking about the Transformation Tab. This can be used to convert between Northing/Easting and Grid Northing/Grid Easting INSIDE OF C3D. When using this tab, you can see the result by looking at your points in Toolspace or Panorama, and you will see the effect on the "Grid Northing" and "Grid Easting" columns. The Lat/Long values displayed in this table are calculated from the Grid Northing and Grid Easting for each point.
The transformation I was talking about earlier, the one in the Point File Format, is used by the Import/Export Points options. This transformation is only applied while transferring points to/from C3D.
As one final point that has caused massive confusion for some, the conversion in the Point File Format only works on Grid Northing and Grid Easting. So when you define the Point File Format, you should use the Grid Northing and Grid Easting tabs instead of the normal Northing and Easting tabs. This shouldn't affect you if you are using Lat/Long instead, I don't think...