I'd venture that an appropriate skills test would probably include normal navigation with (nominally) all of what's on board the aircraft
That's what the FAA does in its checkrides. It obviously works.
Testing competence on "everything installed" also interestingly sidesteps what would be vigorous objections from the flight training industry to making GPS mandatory. If the school does not install GPS then it won't be tested and they don't need to teach it. But if they want modern minded customers they will have to install GPS.... I don't know if the FAA thought it through this way or it was just an accident but it is a pretty clever trick.