Driving directions? No, I don't think so.
The iPhone was very handy in the sinking maze which is Venice. It sometimes took a while for the GPS to get granular enough but when combined with a paper map you were always able to find out which side of which canal you had made it too.
Most interesting was that the directions seemed to include common "bus boat" routes. This screen grab shows the recommended way to get from Piazzale Roma to the first stop at Giudecca.
One thing though - it would certainly be unwise to get off the boat where Google/iPhone suggested. You'd end up very wet.