Wow. A few people actually read the iPhone SDK agreement and saw this paragraph:
Applications may not be designed or marketed for real time route guidance; automatic or autonomous control of vehicles, aircraft, or other mechanical devices; dispatch or fleet management; or emergency or life-saving purposes.
Either Apple made an exclusive deal with TomTom to make them the only provider of GPS navigation software for the iPhone or TomTom got too excited and developed the navigation software without reading the SDK agreement. We’ll go with the former :) via
http://www.navigadget.com/index.php/2008/06/12/iphone-sdk-says-no-navigation-apps/