I updated to Navigon's MobileNavigator from 1.1 to 1.2 and wow, what a huge improvement. It speaks the street names, doesn't seem to have a problem wanting to start navigation when it has already triangulated your position, in-app iPod controls, and night time color scheme.) My guess is they rushed to get their initial release out there because of TomTom, and they both (TomTom and Navigon) shot themselves in the foot. The new features on the Navigon app are solid, and it looks like they are serious in trying to improve this thing, unlike TomTom who hasn't released an update since 1.0.
Having used my Garmin Nuvi 360 to travel thousands of miles across the US, I have some strong opinions on what it's going to take me to not grab my *real* GPS when heading out the door for a long drive to a new destination. On my iPhone, I tried both Navigon 1.1 and TomTom 1.0 when they came out, and my reviews for both products would be "pathetic" for TomTom and "a good start" for the Navigon. Maybe the TomTom actually works for the iPhone 3GS, but for the iPhone 3G the TomTom app would just jump left and right all over the place while you were driving in a straight line. And it would jump across an entire street over or it would say you are in the ocean. I understand that its mostly due to cell phone triangulation, but its something that can be controlled with some code (it should know you can't be on the road for one second, then be 500 ft out in the ocean the next). I'm sure Navigon and I'm sure every other GPS app already does this unlike TomTom.
Trying to use an app like TomTom in front of people reminded me of nerds in high school who would try so hard to make a high-tech gadget do something simple (like bringing a keyboard for their Apple Newton (PDA), staring at that ridiculous small screen and trying to take notes. Then spending half the class trying to troubleshoot why the keyboard stopped working) when it was obvious it was more trouble than its worth. Everyone else in the class would screaming in their minds, "Just shut that thing off you idiot!!!"
I heard great things about TomTom devices, but the TomTom's iPhone app was so bad, I pretty much swore off the brand for good. Navigon on the other hand seems to be rapidly improving their app. I'm looking forward to future improvements. I think it may be good enough to let it start guiding me around when I'm out in the wild without my trusted Garmin Nuvi 360.