xGPS is an app for jailbroken iPhones that simulates turn-by-turn voice navigation. A current version without vocalizations is available now but this new version is pretty darn neat. It works with external GPS devices and uses speech synthesis to read out directions in a voice evocative of Johnny 5 in Short Circuit.
In one sense, this is basically a proof of concept but why isn’t Apple jumping on this? Turn-by-turn would make the iPhone absolutely perfect for driving. Speaking from experience, I’m surprised Apple hasn’t gotten sued for offering driving directions that require you to look away from the road to pop over to the next waypoint.