Some GPS apps for the iPhone simply show the latitude, longitude, and perhaps altitude above sea level. V-Cockpit GPS lite does a lot more: it merges the data from the 3GS's compass and does time integration. That provides horizontal and vertical speed as well. It's all nicely laid out in a cockpit-like design.
There are two versions of this app. One is free and the paid version ( US$1.99 ) adds a heads up display (HUD), full screen zoom for each instrument, a chart mode of the data displayed (like a cockpit recorder), an analog compass, and a few other niceties. One should definitely download the free version to size it up before buying the pro version.
Basically, the data from the 3GS compass and GPS system is collected and displayed in an aircraft cockpit-like screen. While the app will work with an iPhone 3G, I don't recommend it because the 3G doesn't have a real magnetic compass. Rather, it depends on the GPS system and linear movement to calculate a compass heading.
In the basic version, you can cast the display into night vision mode, which is also pretty cool looking in the daytime, mute the jet sound, go into the setup -- where you can set units preferences, and a pretty good help page. Note that this app is not a flight simulator. Rather, it's designed to be used by, say, a car or train passenger, private plane passenger, bicyclist, skier, snow boarder. The last two should use the chart mode. I don't recommend skiing or riding while looking at an iPhone display. The paid version with a HUD could be mounted for a driver in a car, as one of the screen shots in iTunes shows.
Previous versions were criticized for being a bit jumpy in the display values, but I didn't see that. It appears the developer has added a damping function in the settings to smooth out the GPS values.
If you've been looking for an app that merges the 3GS magnetic compass with the GPS system and adds time integration, this is a good app to check out. You can even turn on the jet engine sounds and cockpit alerts -- best not on the commuter train, however.