Even though the iPhone 3G isn't capable of turn by turn navigation via its AGPS, TeleNav will soon fix that for us with an official Application:
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Though it's not among the 522 awesome apps launching today, TeleNav will soon fill a pretty big hole by providing a turn-by-turn in-car GPS navigator app for the iPhone 3G, as we speculated. TeleNav confirmed to us today that its app will include full-color 3D moving maps and the turn-by-turn voice guidance and traffic-aware routing the iPhone Maps program itself is missing. TeleNav already makes decent GPS nav software for Sprint and AT&T phones, way better than Verizon's VZ Navigator. No word on price, but the good news is, it'd have to be available through the App Store, not as a subscription thing from AT&T.
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Craig (and others), check out this video. It demonstrates a lot of apps you can get on the iPhone. Some he paid for, but it looks like most he didn't. It's looks really really awesome, until the end of the video...