I purchased on my iPhone first. Then I went into my wife's phone and 'purchased' the traffic in-app, at which point I was told I'd already purchased and that I could download for free.
This didn't at all work for me.
My wife and I have separate iTunes accounts. However each of our computers is authorized with each others accounts and we have iTunes sharing set up between the two machines.
So, when my wife went to update Navigon it asked for my iTunes password for my account since that's what's associated with the application. I provided the password and Navigon updated on her iPhone successfully.
However, she cannot purchase traffic. When she clicks the buy button for traffic it comes up with an error saying you must first purchase this application in the iTunes store, then throws an error saying that the store cannot be reached.
I'm not sure if I can sign into my account on her phone long enough to put traffic on it or not, but the handling of the in application purchase when multiple devices are being used doesn't leave me very impressed.