Google Maps has had a traffic layer for a while now, but Google released an update today which will include traffic information while navigating and will automatically re-route you based on that information.
From the Google Mobile Blog…
You don’t have to do anything to be routed around traffic; just start Navigation like you normally would, either from the Navigation app or from within Google Maps. Before today, Navigation would choose whichever route was fastest, without taking current traffic conditions into account. It would also generate additional alternate directions, such as the shortest route or one that uses highways instead of side roads. Starting today, our routing algorithms will also apply our knowledge of current and historical traffic to select the fastest route from those alternates. That means that Navigation will automatically guide you along the best route given the current traffic conditions.