A new Android version of Google Maps is going to be released soon, and it will be significantly better than the current version. While the current version of Google Maps and Navigation is very good, it has the limitation of requiring an Internet connection to work because the map display is constantly being downloaded to the phone. If you run into an area that has no Internet connectivity you are not able to use Maps or Navigation.
The new version of Google Maps will use vector graphics that renders the display on the phone. You can think of the new version of Maps as being like a web browser, which retrieves HTML code from web servers and then interprets that code to display a web page. When you search for directions and obtain a route in the new version of Google Maps, it will download all of the data needed to display everything in the entire route, after which the phone does not need to be connected to the Internet to display the map as you travel.
Because the new Google Maps retrieves data rather than graphics, it is downloading much less information. Further, less information for larger areas needs to actually be on the phone. It will be possible for the new Google Maps to download maps of entire states in the same amount of storage space as the current version uses to cache the small amount of map images today.
The bad news is that the new version of Google Maps will only be available for newer phones, so owners of phones like the original T-Mobile myTouch will be left out. When the upgrade to Google Maps is released we will have a better understanding for which phones it will run on.