A free and dual solution is the jailbreak the iPhone using BlackRa1n, then install xGPS. Turn by turn, voice, free. Then upgrade the car PC also.
If you don't want to do that, nothing really beats the larger screen size of the car PC. I use my iPhone for primary nav and it works just fine but integrated with a car PC, it's better.
The GPS on the iPhone is kind of weak and not as accurate as even a cheapo for the car. It works fine, but it works better on the PC.
Bottom line - if you don't actually need nav on the iPhone, stick with upgrading the car PC.