The good folks at DamilerChrysler are hard at work on perfecting a voice-activated navigation system, with an eye toward eliminating as many ambiguities as possible.
The current thinking is to have the driver say the name of a city, then a street, if needed a nearby well-known landmark, like a river or airport or sports stadium. That sort of functionality can get quite complex if you had to type it up while driving, and that is the sort of hurdle that the scientists are endeavoring to overcome.
Manual input systems exist and are becoming quite standard in new and rental vehicles. Voice activation can only make things safer, smarter and smoother for the driver.