According to Gizmodo, the app -- which was demoed at D: Dive Into Mobile conference in San Francisco -- is much faster than the previous iteration and renders in real time.
3D buildings are visible at street-level view, which lets you tilt the image and check out your virtual surroundings. The map will also adjust as you move, dictated by the compass, or you can rotate the map yourself if you want to check out various views.
Perhaps the coolest addition to the app is its ability to work in offline mode -- a boon to those in shoddy service areas or underground on the subway.
Said mode caches areas that users visit frequently. According to Gizmodo, this process is pretty comprehensive: "A quick demo we saw impressed us with how the vast majority of New York City stayed in memory.... Google says that this should compensate for 90% of the times the app currently fails when the connection is bad -- in Navigation, it'll even re-route you if you miss a turn in an area where the signal drops," Gizmodo says.
The app is not yet available, but will require Android 1.6 (Donut) or higher when it is (although more advanced features won't work on older devices running early versions of the Android OS).