I have a different Android phone so can't comment directly on the Desire, but Google recently released turn-based navigation for Google Maps (as of v4.2).
It works quite well. It uses text-to-speech for the voice, which is a bit of a double-edged sword; it sounds a bit artificial compared to say a TomTom, but where it wins is it can (approximately) pronounce road names. So eg rather than just "turn left" you get "turn left onto the A123, Blackburn Road."
It streams the maps over your data connection though. In the car that's rarely a problem, but out in the back of beyond I'm not sure how well it performs, I've not had cause to try it yet.
Android being Android though, you've a lot of alternatives. CoPilot is a full-featured commercial SatNav product, and weighs in at about £25 quid. There are other free, nearly free, open source / community driven etc options too, but TBH you'd be best looking for comparison reviews over on androidforums.com.