Is it really true that the iPhone doesn't have turn-by-turn navigation?
Solution 1:
The thing is that the built-in Maps app uses Google Maps for the maps, and the Google Maps license doesn't allow a third-party to implement voice navigation using it.
So, Apple's Maps isn't allowed to implement voice navigation, but any other GPS software provider can offer the feature along with their own maps.
Here is a nice review of some of the GPS software available for the iPhone: http://www.macworld.com/article/156720/2011/01/gps.html
Also, that situation could change, since Apple purchased a maps company a few years ago.
Solution 2:
There are plenty of apps for that, especially in the US (where I'm not). There are the apps that mankoff suggests (I use TomTom here in NZ), but I think he left out the best value option: MotionX GPS Drive - they actually do a bunch of different applications, and all great value. Check them out.
BTW, what phone are you using at the moment? What app are you most familiar with?
Solution 3:
There is an app for that. Look in the App Store. I think the going rate for the GPS apps (Navigon, TomTom, etc.) is about $50 USD.
The built-in Google Maps app does have turn-by-turn (it lists the turns you need to take), but it does not have a voice, and it does not recognize when you have deviated from the suggested route and then re-program itself.