Google announces its next steps for Google Maps (mobile): Google Maps Navigation (Beta) for Android 2.0 devices
This feature should be par with your typical GPS navigation system i.e. turn by turn voice guidance, automatic re-routing, 3D views. This feature does not only rely on GPS but also uses the internet to provide additional functionality. Here are a few native features to expect from your Android 2.0 GPS:
Search by Voice
Traffic View
Search along route
Satellite View
Street View
The first device anticipated to have Google Maps Navigation will be Verizon's Droid.
Here is the official release from Google