This thread will show you how to unlock it so that you can upgrade to a 3.xx radio, and then flash a GPS capable ROM.
click here -->
http://forum.ppcgeeks.com/showthread.php?t=20370
I am personally using the Leaked Sprint 3.02 ROM with the PPST.exe fix and it works flawlessly. If you unlock your Touch and update the radio following the steps in the first link, and then want to give the Sprint leaked ROM a try. You can download the Sprint Leaked 3.02 ROM here.
Click here-->
http://rapidshare.com/files/119516543/V3.02.rar
The password to UN-RAR the file is:
NotTilRelease
When you are done. Hard Reset your Touch, and then search in the /Windows folder for a file called PPST.exe and double tap it. It will correctly provision your phone so that the GPS works perfectly. Once that is done, you can use LiveSearch or GoogleMaps for navigation (or any other GPS apps)
I hope I have helped, and make sure that you follow the directions word for word. It is very important that you do so. Good Luck and have fun with it!