Very difficult. Interfacing with LCDs is problematic in general, and while kits exist, they often cost so much that it would be much cheaper to simply buy something premade. Some of the iPaq screens are beautiful and offer resolution you can't get off the shelf, as far as I know, but it would be prohibitively expensive to cut it out and use it as a direct monitor.
Now... there might be a way to hack your way by not removing the screen from the iPaq. Perhaps there's a software solution that could involve running a remote desktop or VNC session from it over a network to a terminal services session on your main computer... that way you don't need to reinvent the wheel on the iPaq hardware-wise.
But it would be difficult, and you'd need a legit terminal services server (because the one built into XP will lock out the main console when you log in so you can't run the rest of your displays at the same time).