Google launched a turn-by-turn navigation update to Google Maps yesterday in the UK. During the press conference they stated that they plan to bring the update to other smartphone devices including the iPhone.
Currently the only way to get turn-by-turn directions on the iPhone is buying an app such as TomTom which is $69.99. Google would offer their service for free. This will create some more competition in the navigation market and hopefully force the navigation creators to continue to innovate and continue to make something that users will pay for.
One of the downsides to Google Maps is that it requires an internet connection if you make any deviations from your original trip. It will pre-cache your entire trip so if you stay on course and you lose an internet connection you won't lose your progress. You will need an internet connection if you make a detour so it can recalculate.
UPDATE: A Google representative told PC World, "We did not say we would bring it to iPhone, we said to date we've had it on Android and that in the future it may come to other platforms but did not confirm this will be coming to iPhone at all." This doesn't mean that it won't come to the iPhone it just means that currently Google isn't promising that it will.