Google Navigation is a free navigation system that works on mobile devices with Android 1.6 or 2.0. For more details, see this page.
Tom in the Google Mobile Help forum added a few more details that are not in the blog post.
(1) Android 1.6 that is a build off of the userdebug (test-keys) of the Android OS is not working with navigator. Google is working on a fix for this.
(2) Part of 1.6 also includes Layers functionality and My Maps access.
(3) There is also a bug fix for Traffic layer failing due to memory issues.
Forum discussion at Google Mobile Help.