Hi,
I just wanted to add my two cents on this app. I went ahead and bought it (tired of waiting on TomTom). So far, I like it a lot. I don't have any experience with stand alone units, so I can't make that comparison.
My setup is an iPhone 3GS hooked up to my stereo via headphone jack to RCA inputs on the back of the unit. Also have a car charger, of course. The unit is (currently) mounted on the air vent at the top of the dash, just off to the right of the steering wheel.
I bought the app just before heading home from Columbia, SC to Anderson, SC (2 hour trip by interstate). I decided to test the unit out more thoroughly by avoiding the interstate and 'scenic route' in the route profile. I get bored with interstate travel, which is one of the reasons I wanted this app (or one like it).
No interstate driving added about 30-45 mins to the drive, and not once did I lose a signal or have it show an inaccurate reading on the display. It was excellent the whole time. The only (slight) problem was on one country road, the route took me to veer off to the left, but i was never verbally prompted to. I would have expected it to, since veering off to the left was actually moving off the road I was on and onto another even though the road itself was the same road number (I'm not sure if I'm making sense, but there ya go.

).
Other than that possible glitch, everything was perfect. And even without the music muting, I could still hear the sound very clearly as it was being sent to the stereo over the headphone jack anyway. And you can independently set the voice volume from the main ipod volume, so it allowed me to tweak it as necessary.
I would also hope they would allow the option of having the ipod pause rather than just mute, as it would help more when listening to an audiobook. While listening to music, it's perfectly fine to mute for a few seconds, but with a book or maybe a podcast, you might miss something important. Good thing 3.0 added the 30 second skip back (or whatever it's called).
I also tested it just this morning on the interstate to Greenville, and again, all went well. I love the signs for the exits on the interstate. That would have been a huge help if I wasn't familiar with the area (and the bizarre exit I have to take from 85 to 385). Very nice.
So I give it a big thumbs up so far (hopefully, it stays that way). I do plan on getting a windshield mount, as I know it would probably improve my signal more (even though again, I didn't have any problems yesterday or today), and I know the compass on the GS gets all wonky where it is currently placed. I think it's the metal in the car or something. If I hold the phone up to above the dash, the compass works great. I don't know if Navigon currently or in the future will use the compass to show the orientation of your car from a still position (didn't really test that), but I'd like to know the compass is functional anyway.
Also, is there a manual for this thing yet? I checked Navigon's site, but all the user guides I saw was for stand alone units. I may have missed it, of course. I just wanted to know exactly what the difference is between fast and optimum in the route profile and exactly what the routing AI does for 'scenic' route vs. the other modes.
I think that's about it. If anyone wants to know anything else, just reply back to me.
Carl
P.S. One other quick thing... I do have my phone jailbroken, which enables me to use backgrounder to jump out of the app and do other things without quitting the app altogether. Works great on the GS. My old 3G was somewhat flaky with backgrounder, probably due to the lack of memory. I finally jailbroke (if that's the word) after reading a post here about how well the GS works with the extra memory and better processor, etc.