The beta 2 release of iPhone firmware 2.2 is here. There are major improvements to the Maps application. Directions can now be found in three different modes, for driving, mass transit, and pedestrians. Street View has also been added, and allows the user to see street level photographs of a location just like Google Maps on the web.
When getting public transportation directions, subways and buses are both included along with scheduled times from Google Transit when available. Want to send your location to someone you're supposed to meet? Location sharing is another built-in feature that makes this easy.