Using Navigon on the iPhone 4 is way better than my husband's free standing TomTom. As others said, it's faster to get an initial GPS lock, and it's more convent to carry one device instead of two.
One big advantage I haven't seen mentioned yet is the integration with other apps: both the Yellow Pages app (in the US) and the app AroundMe work very well in conjunction with Navigon. You can locate a place of interest or retail establishment in either of those apps, and connect directly from there to Navigon. No copy/paste of addresses needed. AroundMe also works with TomTom's app. If you're jailbroken, there's also "Navigate from Maps" in Cydia, which allows you to do the same thing with the built in Maps app, linking directly to either Navigon or TomTom.
The integration with apps like these makes Navigon way more useful to me than the standalone program alone.