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Context-awareness and Location-Based-Services are of great importance in mobile computing environments. Although fingerprinting provides accurate indoor positioning in Wireless Local Area Networks (WLAN), difficulty of offline site surveys and the dynamic environment changes prevent it from being practically implemented and commercially adopted. This paper introduces a novel client/server-based system that dynamically estimates and continuously calibrates a fine radio map for indoor positioning without extra network hardware or prior knowledge about the area and without time-consuming offline surveys. A modified Bayesian regression algorithm is introduced to estimate a posterior signal strength probability distribution over all locations based on online observations from WLAN access points (AP) assuming Gaussian prior centered over a logarithmic pass loss mean. To continuously adapt to dynamic changes, Bayesian kernels parameters are continuously updated and optimized genetically based on recent APs observations. The radio map is further optimized by a fast features reduction algorithm to select the most informative APs. Additionally, the system provides reliable integrity monitor (accuracy measure). Two different experiments on IEEE 802.11 networks show that the dynamic radio map provides 2-3m accuracy, which is comparable to results of an up-to-date offline radio map. Also results show the consistency of estimated accuracy measure with actual positioning accuracy.