Just to make sure everything is clear here:
1) TomTom's traffic feature DOES have a bug.
2) The bug does NOT affect the traffic avoidance.
In TomTom, there is a traffic sidebar that can be brought up by tapping the traffic icon on the main screen. On the sidebar, it shows a summary of your route and how far away you are from each traffic incident. Right now, the sidebar never displays any incidents (even if TomTom has detected some) and just says "Updating Traffic".
This doesn't affect TomTom's traffic detection and avoidance. If there is traffic on the route, it will be reported to you. If the traffic is significant enough that TomTom can find a faster route, it will. While driving, if it detects a faster route, it will warn you and ask if you want to take the alternative.
The only issue is that you can't actually see where each incident is relative to your current position (e.g., 5 miles away, etc) and the details of each incident (i.e., how long the delay is, what the incident is, etc).
In conclusion, it's a bug for sure, and an annoying one, but the functionality is still there, so it does it's job.
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Okay, now that we have that out of the way, Navigon's traffic is definitely the more comprehensive option between the two. Even when TomTom's traffic is 100% working and you can view traffic incident information, Navigon is still better. I like that in Navigon, I can view traffic information just for the hell of it. As soon as I start the app, I can view traffic incidents near me and just see what is going on. However, once I start a route, I can tell Navigon to only display route-related information. Very cool. The information it gives you is solid, too. It tells you where the traffic starts, how far it goes, the average speed, and a brief summary of what is going on (accident, road work, sporting event, etc).
In TomTom, you can only view this information if it pertains to your current route. I can't just say "view nearby traffic" and be presented with a list that I can review. You can browse the map and see where traffic incidents are, but you won't get detailed information. It's been a while since I've been able to view incidents individually (this bug has been around for a long while), but I don't remember the details being all that great. Occasionally it would say something like "road work" or "accident" but usually it just said something like "congestion". Not that it really matters, but if it's an accident vs. just general congestion, I may change my mind about re-routing.
As far as avoidance, I'd have to say TomTom does a better job of determining when to avoid the traffic and calculating the alternative. Of course, this just stems from the fact that TomTom has better information in general (i.e., average road speed for that time of day, etc) and overall does a better job of finding the best route. This is good, because there are really very few options for manually avoiding traffic. You basically entrust TomTom to do all of the work. You can ask it to minimize all traffic delays (Menu -> Route Options), but you can't tell it to avoid incident X.
Navigon basically lets you do anything you want. You can let it handle everything, or you can go through every incident and pick and choose the ones to avoid. This is pretty sweet, and I really like this aspect of it. However, because it doesn't have the road information that TomTom does, it overestimates how bad traffic is and I found that it was a little trigger-happy on re-routing me. Sometimes there may be traffic, but it's still the fastest route... often times in TomTom, I get traffic delays up to 15 minutes or so, and I'm still not re-routed simply because there is no faster route available. In the same situation for Navigon, the traffic delay might be 25 minutes or more because it is not taking into account the typical congestion on this road. Thus it may re-calculate to a "faster" route when the route isn't really faster.
This last part is more of a criticism of Navigon in general, not of the traffic implementation. The traffic is done extremely well, and it's a flat-fee, not a subscription. My only real gripe is the way that it displays traffic on the map - it kind of puts a grey, yellow, or red border on the roads where there is traffic. It's really difficult to see this when looking at the map. Other than that, the traffic in Navigon is awesome.
So, to put an end to a really long-winded post:
As far as the traffic PRODUCT goes, Navigon is the winner. Way more options, and it lets you take control if you want. Since it's a flat-fee, I feel like you get a lot more for the money.
As far as the actual end result, TomTom wins because it estimates traffic delays better, decides when to re-route better, and calculates better alternatives due to having so much more information about the roads. It doesn't give you much control over what happens, but it does such a good job that it doesn't matter. It is subscription-based, though, which sucks but it's not very expensive ($20/year).
I need to get a life.
Very thorough, helpful information.