Adena at All Points Blog references a story about how cars depreciate faster if they have built in navigation systems. Which on the surface of it is not good news for those of us who always buy cars with cool built in navigation systems :) !! However, when you think about it, this is just a logical consequence of the fact that cars are becoming more high tech devices. When you buy a digital camera, you can guarantee that within a few months there will be something better and cheaper on the market - you don't expect to have a good resale value on it in 3 years time. Over the next few years we will see a lot more technology coming into cars, including much more in the way of online information systems - real time traffic information, gas prices, etc - so I think the trend of cars depreciating more rapidly will continue. And I don't think that this necessarily indicates that portable systems will overwhelm factory installed systems - the latter tend to have various features that the former don't, for example they mute music playing in the car when they need to speak directions, and many of them integrate with inertial systems in the car so that they can continue to work when a GPS signal is not available (for example when going through a tunnel). However, I think that car manufacturers will need to work on making their software systems (not just for navigation) more easily upgradeable - though again I think this will be a logical step as we move to a situation where most cars have wireless connectivity.
Finally, as Adena mentions, there is a quote in the article that navigation systems are now being "sold everywhere. You have Bed Bath & Beyond selling portable navigation these days. It's bizarre." I guess navigation systems would fall into the "Beyond" category :) ?!