How accurate are Car GPS systems in downtown city areas like
Manhattan, to within how many feet of the precise location do they
work?  Is coverage comprehensive or do tall buildings block the signal
often?

Most car GPS systems are accurate within about 10 feet as long as they
can get a good GPS signal. Getting a reliable GPS signal requires a
direct lign of sight with at least 3 satellites out of the 18 GPS
satellites out there. Therefore, in spots with tall buildings like
Manhattan it's hard to always "see" 3 satellites, so the GPS signal
will go in and out. I hope this helps!

The cheap GPS receivers (ie L1 frequency only) have a stated accuracy
of 10 metres (approx 30 feet) in horizontal postion and a vertical
accuracy of 1.5 times that of the horizontal.  Part of the problem of
using city base maps is that the accuracies are never given.  The
companies do not divulge how their geospatial data was collected
(satellite photograpghy, aerial photography, etc.) thus they will not
quantify the positional accuracies of street corners and other
features.

As dangps-ga stated, the tall buildings in a city like Manhattan will
block the GPS signals from reaching your receiver.  An integrated
system of GPS and an inertial navigation system would work well to
solve the problem of weak GPS singals.  Starting at a known position
(ie GPS postion), and traveling at a given speed and direction, the
inertial navigation technology would be used to determine your current
position (if the GPS signal was unavaliable).

Another option is to receiver a differential correction to your GPS
unit.  This increases your accuracy and through radio connections, it
is also possible to calculate your postion.  The European Space agency
is currently working on such a system to be integrated into the GNSS
(Global Navigation Satellite System) called Galelio. 
http://europa.eu.int/comm/dgs/energy_transport/galileo/index_en.htm

The Canadain government also recently released the CDGPS, another
differential system.  It will allow for greater accuracy depending on
the type of receiver used.
http://www.cdgps.com

The United States is continuing to send up new satelliets for improved
accuriaces.  By 2009 the standalone accuracies on L2 should be between
5 to 10m and by 2013, an additional civilian code of L5 will be added
to achieve an accuracy between 1 to 5 metres.