is working on an actual GPS module to plug into the iPhone's dock connector. At present, the hardware is still under development and the software interface is primitive. It is able to pull longitude and latitude coordinates from the GPS module and then display it on Google Maps.
A YouTube video
is also available demonstrating its current functionality.
The product is not expected until February 2008 and they do plan on placing it in a stylish plastic enclosure. It will require a Jail Broken iPhone and software will be open source.