Adapted from an email I just sent to a buddy...
I think it's a great, smart move by Apple. They're licensing Tom Tom's technology, so I don't think you'll be disappointed in the performance of the maps. They certainly realize the spotlight is on this change, so I don't think they're leaving anything to chance. It's rare that Apple will intentionally shine a spotlight on themselves and screw up (Ping and Antennagate are the only two that immediatelycome to mind).
Maps provide a huge amount of data that Apple wants and also doesn't want Google to have. Google was gathering data from essentially every smartphone on the planet between Android and iOS, so it made sense for Apple to want to stifle that since Google is a direct competitor of theirs in mobile.
Additionally, for the past few years, everyone has been saying how geotargeted recommendations/deals (you're near Chipotle, go get a free coke w/ a burrito) would be the next huge thing. It hasn't happened yet, b/c technology has been slow or people have been unwilling to adopt it (who outside of tech really uses foursquare), but it's definitely going to happen at some point, and now Apple has a front row seat to a huge monetization and advertising opportunity.
Apple has really struggled to monetize the software side of mobile. iAd has done nothing and iTunes doesn't make much money. The most successful thing they've done is take a piece of other people's innovations through their app store commissions. They need to make sure they get better at monetizing mobile devices and to do that, they need to be where people spend their time. Maps is a massive opportunity that they're tackling head-on. They're also trying to flank Google search with Siri and the improvements they announced there.
It's going to be interesting, but I think this was a great, bold move that is setting them up to get better at monetizing the software side of mobile. I think the maps experience will be on par with what Google was providing, and Apple will also add some juicy Apple-like integration slickness across the iOS platform that make maps stickier than ever.