OK... I got the BadElf....and it does indeed turn and iPodTouch, iPad-Wifi into a full-blown GPSr with an app that puts full maps on the device - not all apps will do that - so, caveat emptor. The device will also hook to an iPhone, or 3G-iPad and supplement the device's own internal GPS with apps as well.
I have the Navigon app - got it while it was on sale - my initial impression of the app is probably colored by experience with Garmin Nuvis - but after using the app a little bit, it's quite functional with the BadElf on the iPad-wifi. TTS instructions are a similar experience to the Nuvi, and the map seems to follow quite well. Will need to get more experience with it. It's good so far.
Before I went for the BadElf, I did some research - found that some of the Bluetooth GPSrs out there can be made to work with an iPad - I went the BadElf route because it seems to be made specifically to work with the Apple devices.