iPhone's store a small amount of map data but do not store a full and complete map info data base on board like a true gps navigation unit like a Garmin or Tom Tom. Connection to the Internet is require to actively download and refresh the map info that is needed when you reach the edge of the resident data set. I've verified this many times in the areas I ride in where loss of carrier signal can occur for extended periods. Yes the GPS chip knows where you are, but if the relevant map info isn't load, you can't display a visual representation of where you are.
This is the case w many iphone GPS apps. However the Navigon GPS for iPhone actually has the maps resident on the phone. You can have all of North America or just some states/provinces. To save space on your phone you can select which map you want resident and change your selections at will when you've got wifi web access (at no cost) or download through iCloud (data charges apply)
MotionX lets you download the map for your route before starting as well. I haven't used that feature, but will next time I head to the Dragon (no cell coverage up that way.)