I use both Navigon and tomtom.
Speed:
If you have an old iPhone 3G then get TomTom because Navigon is just so sluggish on the 3G that it makes you want to toss the phone out the window.
On my new 3GS both apps run great with Tomtom still being slightly faster, but there really is no perceptible difference day to day.
Interface:
Navigon's interface is much nicer IMO. The maps look nicer, they go from night to day automatically, the reality view for the highway intersections works better etc. However, TomTom also has some benefits here.
TomTom allows you to not only see a listing of turns on the route, but you can choose which parts of the route to avoid. For example, if you hate driving on a particular road because of traffic, construction, cops etc... hit avoid and you are routed differently. No such option on the Navigon short of awkwardly inserting waypoints along the way.
Traffic:
Navigon's traffic option wins hands down. Currently they have live traffic whereas TomTom only has historical traffic data. Obviously I'd love a mix of both.
Maps: Depends on where you live. Both maps have errors.
POI: Finding POIs in Navigon 1.3 is retarded.
Nearby search is very limited range
Searching for a POI in a city means you must know the exact city name that is entered. So if you aren't familiar with all the suburb names you won't find your POI. Your friend lives in Cleveland? You won't find the hotel in his area unless you specify the suburb city's name.
Statewide search is only for major attractions like airports and parks.
TomTom's search works a bit better because it searches a much wider area. All this will change of course with Navigon 1.4's google search.
Conclusion: To me, the selective route blocking is the most important feature I can't live without. Even many Garmin standalone units don't offer this, which is why I can't stand using Garmins. They can only avoid the "next" turn.
Why?
Well a few years ago I'm driving along in Tucson and a highway was closed. Garmin kept insisting on routing me back on the same damn closed highway for the next 30 miles. On a TomTom unit a simple press of the avoid (and that highway name) would have worked.
For me all this means that if I need to go on a long trip I'll prefer to use Navigon with live traffic, but I'll have TomTom with me in case things get hairy so I can switch to the app that gives me better route control.