The GPS in the new phone will enable the phone to determine your exact location using the GPS satellite signals, but you need some software (and a database of maps) to turn that information into actual directions. The iPhone includes Google maps, which does give you directions -- but it doesn't read them aloud. However, people seem pretty confident that there will be an app you can purchase that will provide this funtionality -- it's just not certain when.
Tom Tom has already announced that they have an app ready for the iPhone that has turn by turn directions.
