From the Google Mobile Blog:
“Starting today, our routing algorithms will also apply our knowledge of current and historical traffic to select the fastest route from those alternates. That means that Navigation will automatically guide you along the best route given the current traffic conditions.”
Previously Google Maps Navigation would take the “fastest” route and set up alternate routes like ones that use highways instead of side roads. As of today all you have to do (aside from buy an Android phone) is open up the Navigation app. The app itself will use realtime traffic data crowd-sourced from users to try to get you there sooner. No guarantees.
The functionality is available in North America and Europe, where the realtime traffic condition data is currently available.