navigation
The satnav system is made by Denso. They have a good description of it on these pages:
http://www.denso.com.au/satnav_main.htm
There is a little box under one of the front seats (for a US 2004, under the driver's seat).
This is the ECU, what reads the map/POI/voice DVD, and also the gyros. The GPS antenna is buried elsewhere (probably deep under the dash).
The US maps are provided by GDT, Geographic Data Technology.
http://www.geographic.com/home/index.cfm (you can report map errors here)
There is a separate large owner's manual just for the navigation system. It can be downloaded from the Prius-2G yahoogroup, last I checked.
Basically, the car gets its position based on GPS satellite information, and barring that from the car's gyroscopes and wheel speed. It displays that on a map, taken from the DVD database.
you can have it route you to a destination, and it'll give you voice prompts for turns. it'll auto-reroute you, too, if you stray off course (and have the setting on). you can also have it display icons for things such as ATMs, gas stations, fast food, universities, etc., and have it direct you there (and it'll give you a phone number to call there if you wish).
you also get some memo/reminder screens, that you can program to remind you when it's time for a major service, or it's your anniversary.
On the 2004 Prius, you also get with the navigation system the capability for the car to act as a bluetooth headset to your compatible bluetooth cell phone. You also get the voice-activated commands (for nav, radio, and climate control), but in practice the Prius tends not to recognize your voice commands more often than it understands them.