Yep. And not the only improvement. The new Nav system is a real upgrade from the one in my 2007. It may not be perfect, but it isn't really fair to compare it to what was provided in the GenII models.
I totally agree. That is exactly why I traded in my '05 Prius with almost 84,000 miles for a new '09 Prius.
Five years ago I bought a 2005 Prius, pretty well loaded up. Having the nav system at that time was a big deal to me. There were no back-up cameras available at the time except for aftermarket, and I never installed one. I have been able to back up just fine, as has my wife. After a couple years, the fact that my Toyota nav system could not find the streets of the community in which I worked began to become frustrating for me. The prospect of spending a couple hundred bucks for a new DVD--without a guarantee that my new streets would even be on it--was not acceptable. Fast forward five years: my beloved 2005 has 80K miles on it, and my college-age daughter's old car is dying. Time for a new car for me and a hand-me-down 2005 Prius for my daughter. So a couple days ago I bought the Prius III I had ordered a few weeks earlier. JBL-Bluetooth, but no nav. Between ordering the car and accepting delivery, I bought a Garmin 255W for $170--less than 1/10 the cost of the Toyota nav system. For another $100, I get four database updates a year from Garmin. I love the Gen III, and I am very happy I got it. This time I got it with exactly what I needed: Bluetooth, decent sound, VIP security, and that's about it. I've got only driver's door smart entry, which is appropriate for almost all of my driving. I paid a couple thousand less than I did in the summer of 2004 for the last one. YMMV, of course, but I am very proud of Toyota for keeping this car reasonably priced and not pushing features at me that I don't really need.