I am embarrassed I didn't think of this myself.
One shortcoming of the iPhone is that the google maps app - though it is without a doubt amazing - doesn't have any positional information. That is, the map doesn't know where you are. There's just no room in the iPhone (or juice in the battery) for a GPS chipset.
But who says the GPS has to be built in?
All credit goes to Craigy on MacRumors for the idea. And it's a fantastic one. If you simply kept a bluetooth GPS box in your car, then your iPhone could use it to provide a "You are here" pin in the google maps app, and could automatically step through the turn-by-turn directions as you go. It could even give you ETAs (with real-time traffic, of course).
Yes, it would be better to have GPS built-in, but Apple could create a whole market for iPhone GPS add-ons. And, conceivably, they don't actually have to be bluetooth tethered. There's no reason you couldn't simply connect up a GPS add-on to the dock connector.
But in any event, it's going to require a lot of software support from Apple.