I used my iPhone as a nav device with music and it worked well. I bought an app called Motion X and it has an integrated mp3 player that will mute the music when instructions for upcoming turns are being spoken. That app was cheap ($2.00 IIRC) but the voice guidance is $20 year.
I just switched phones and got an HTC Merge (Droid) and love it. I have the Navigon app so that there are no issues with maps that need to use data to load. It doesn't have an integrated MP3 player so I can't figure out how to get the music to mute while directions are being spoken. It works great other than that.
Also with the droid it will mute the music automatically when Navi has something to say
Is there a setting that I need to change? I am still new to the Droid platform so I am still working out some of the kinks.
I used my 'droid (iPhone competitior) on this trip. Mountains, deserts, seas, valleys, plains, etc. Worked great through this abuse: http://www.zggtr.org/index.php?topic=2298.0