Its been fixed. 126.96.36.199 will contain the fix.
When on CNavRouteTypeModule, you get to choose 'route by shortest time', 'distance', 'least hwy's', 'most hwy's'.
Problem: only 'shortest time' is set correctly.
If you click 'by distance', on the next screen (CNavShowRouteModule) you will see 'shortest time' selected. I verified that it's not just a UI bug. If you click on 'shortest distance' on this module now, the route will change to accurately reflect the shortest distance (given the two options are actually different).
If you click 'least highways' on CNavRouteTypeModule, you'll get 'by distance' selected on CNavShowRouteModule.
If you click 'mosy highways' on CNavRouteTypeModule, you'll get 'least highways' selected on CNavShowRouteModule.
So, it's like they're one off (except for 'by time' which is correct).
Asuming this is a simple coding mistake and will be fixed in next release?