BoyGeniusReport posts a screenshot from debugging menus in the 3.0 beta firmware which seems to confirm that Apple has built-in magnetometer (digital compass) support into the next operating system.

So the formula goes like ...
Magnetometer + GPS + accelerometer = you are going from HERE to THERE at SPEED x
The missing element still: B.Y.O.M. - bring your own maps.
Everybody’s free to develop GPS navigation applications for the iPhone now.
As long as everybody brings own maps.
Oh yes, we will ...!

