Welcome to LOC!
As far as the NAV goes it Kind of IS WHAT it IS…there are many of us here who are happy with the NAV systems in the Lexus models and there are those who prefer the GARMIN. The new NAV systems are much better of course…your NAV system was developed in 2002 or even before that…so of course it is outdated. My old 2004 RX330 looked prehistoric compared to my 2010 GX460 NAV system. The Garmin that you are comparing it to I am sure is much newer. The updates you can purchase will update new roads, POI's and such it may be worth it since your maps and POI's are outdated...but the software will be the same. So the NAV system essentially will be the same as it is with newer MAPS..streets...POI's but same old same old software. If you are interested in updating your maps try here http://lexus.sewellparts.com/ they have good prices.
If what you are looking for is to do a complete NAV replacement...I would think you could find a replacement unit for a price that would fit in the existing NAV...but you problem is going to be having all of your existing features work. Sorry but I don't think it would be worth it IMHO. Maybe try one of the new all in one head units I know some of the guys on the BMW forum have found some for the X5 but I wouldn’t spend that kind of money on updating my NAV system. It is a shame that you can’t just swap out the NAV system to update it but it is just not that simple.
Good Luck to you!