Interesting questions ... but testable.
Google Navigation runs in the background via a set of services. Once you start navigating you'll notice a blue triangle in the notification area (upper left corner). If you switch to an application ... switch songs.. etc... until you reach your destintation, GN is still running and will prompt you with audio updates.
To get the GN activity back, drag the notification bar, and select the GN item in the list.
If you get a call while navigating and, the GN screen will become the active activity again once the dailer / call activity completes. If you use the browser or hit the home button that changes the activity stack, you will need to bring the GN activity back to the foreground manually via the notification bar.
I didn't bother to test how much it will cache. GPS is separate from the cellular network, and updates when the GPS is turned on, even if your in a call.
The no data connection on a CDMA phone is limited to the cellular network connection. If you have a wifi connection, you can "surf the web" while on a call.
Works same with blue-tooth headset.
The only issue, I've found (which just may be my settings), is once the dialer/phone call activity is on screen, the phone will honor the screen timeout settings.... once the call completes the screen is not turned back on, you need to hit the power button and then unlock the phone.
You will be then greeted with the GN activity, and the always on screen settings will then be honored.
^^ -- I think that should be classed as a bug, the screen settings should be handled by the GN service rather than the activity.... so the screen never times out while GN is running.
If you want to cancel navigation before your terminal point. With the GN activity up, hit the menu button, and hit "Exit Navigation" button. Once you reach your destination, GN auto terminates itself.