I really doubt that is true. Both companies are probably making tidy sums of money. TomTom has a lot of clout. While they might be "behind" I have a suspicion they will pull ahead of Navigon soon enough. TomTom is a much more reputable company. They have a very profitable hardware gps business. The iPhone is another way for them to reach customers. But they aren't going anywhere.
Expect TomTom to be the best in the next year or so.
As others have said, while it may turn out to be a great app, as the maps won' t be resident on the phone, it will be useless when roaming.
you will still need one of the paid apps....unfortunately....