iPhone won't sync Navigon - says there is no room, but there is plenty

I have been having this issue with my wife's 8gb iPhone. With each Navigon update, you have to install a new 1.2ish gig application. To do this, it requires that we delete the app from her phone to open the room to re-install it. However, even with it deleted from her phone and having over 2gigs of open space, it still says that there is not enough room to install it.

I have fixed this issue before by wiping her iPhone before - but surely this shouldn't be the solution to fix this.

Also possibly related, sometimes her iPhone when connected is not recognized, until she opens iTunes manually.

Bum iPhone?