I should point out that there are 4 or 5 developers that are coming out with true navigation programs for the iPhone that would include the 'rotating maps' feature. AT&T already has theirs out at $10/mo. TomTom, Navigon and others are expected to release fairly soon.
Well, if you turn on the compass readout while in maps (just tap the location icon a second time) the map will rotate as you do, keeping the map oriented to the compass. I know this may not be what you're looking for, but maybe it is....
The rotate feature with the compass is only available on the 3GS since the compass is only available on the 3GS. Just wanted to clarify so everyone knows you can't do this on the 1st gen iPhone or the 3G.
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Rotating maps in google maps
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