David Pogue, the famous Tech critter at NYT isn't really positive about the iPhone's GPS-capabilities:
According to Apple, the iPhone’s G.P.S. antenna is much too small to emulate the turn-by-turn navigation of a G.P.S. unit for a vehicle, for example.
Instead, all it can do at this point is track your position as you drive along, representing you as a blue dot sliding along the roads of the map. Even then, the metal of a car or the buildings of Manhattan are often enough to block the iPhone’s view of the sky, leaving it just as confused as you are.
Huups - Steve Lombardi who is with the Virtual Earth team at Microsoft completes this statement and pushes into the opposite direction:
(...) still a 2 minute perusal of the wikipedia article on GPS by Apple could help to avoid further clouding of this already very misunderstood technology. If you can get 2 successive fixes, you can calculate direction and speed. assuming you have access to the underlying street network, you can then calculate turn guidance. software and data!
