Okay, I'm not a programmer, so please bear that in mind as I throw out thoughts...
We know that apps can write to the SD card, as demonstrated by a few programs, including GPS programs like Wayfinder (which creates directories on your SD card and caches maps there), and also one of the BBTracker apps*.
We know that programs can read from the SD card, such as the above mentioned BBTracker apps, which can load tracks; programs that can read ringtones that are used in alarm alerts, etc., basically by pointing it to the file.
We know that on other (non-BB) platforms, maps can reside on SD cards and used by GPS applications.
We also know that maps are available on the 'net in some form. While some of these may be NavTeq maps (purchasable from NavTeq) or other mapper companies, and some are made or available by other means.
We know that programs exist that can use internal GPS and/or BT pucks and can locate you on various applications (berry411, Infospace Find It!, Googlemaps, etc.).
*note: there are two BB Tracker type apps out there and I have tried them both, they do different things but do use the GPS. One keeps uninstalling itself every time I use the App Loader, probably because they both have the same filenames for the .cod but that's another issue.
Now again, I can't program. I don't know API's, and java is what I have first thing in the morning. But it looks like all the elements are 'out there' to the untrained and the ignorant (thass me!).
While I do realize that we might not see turn by turn navigation tomorrow on a homegrown GPS application written as a hobby and a labour of love; it doesn't seem that a GPS application that starts off simpler (overlaying current position on a pre-existing map stored on SD card) to give a "follow me" type mode would be too far off in programmability, which might then evolve to a navigate from point A to point B, to finally become a turn by turn application.
What do you (users, programmers, etc.) think? Am I way out to lunch or in left field, since I don't understand what's involved? Don't worry about shooting me down, I will learn from the answers.