I thought the same until I got my first smartphone -- which I'd never have bought for myself, but a friend gave me his old iPhone. They're incredibly handy little tools.

If I cycle commuted or traveled and couldn't afford to miss a turn, I'd definitely use it mounted on the handlebar for navigation. In fact it might have helped on one of my longer rides last month. The lightly traveled access road I usually ride merged with the main highway, and I was stumped trying to find my way back. I pulled the phone out of my handlebar bag to check the map, but it would have been handier and safer to navigate back to the access road with turn-by-turn voice navigation assistance. Very tricky situation in heavy traffic.

But I don't encounter that sort of thing often so the phone usually runs the Cyclemeter app in the background with the phone in the handlebar bag, and I'll consult it for navigation if I'm hopelessly lost. But usually I prefer to bumble my way around to learn a new route -- seems to stick in my memory better that way.