I think Google could improve street view with these points:

- allow the user to drag little pawn to a different point, while in street view

- when the user asks for directions, allow the user to follow the path of the route in street view (let the user click "next" to move to the next important intersection, but still maintain streetview controls)

- when the user asks for directions, show an overlay on the streetview with an arrow pointing into the direction where you're going