Android is not as 'sexy' as the iPhone, but the Google Maps Navigation tool is an extremely 'sexy' application that make iPhone users drool. Just take a look at this video demo:
Heck, it makes me want to buy my wife a Droid, even though I know she won't use 99% of the features. Don't worry, I won't get her a Droid, but I will encourage one of my employees to pick one up so we can mess around with the device.
Will these features ever come to the iPhone? Possibly. Who wouldn't want a free navigation system on their phone? Heck, Google's application looks way better than most paid options.
Why is Google doing this for free? I assume data collection and the ads they can eventually embed in the software.