There was a post about something similar to this on slashdot a couple of weeks ago pointing to this site:
Though this is just a comparison for 128kbits/s recordings, it notes that there's a japanese programmer that's tweaking the settings in vorbis that gives better results than stock vorbis so you might want to try use that instead.
FLAC is lossless compression, so it should be bit for bit with the original wave file once you decompress it. As you said though, it makes rather large files. If you want a comparison, there's also another codec called Monkey's Audio around which is also lossless and generates slighly smaller files than FLAC (though it takes a bit longer to compress).
I've noticed many many awful glitches while playing MP3s in my car.. loss of stereo imaging, sharp cutoffs with some instruments due to masking, weird sound instruments in some cases (especially quite guitars).. I've been trying to use Monkey's Audio and FLAC where i can now.
I guess car audio is something that perpetually costs more and more money You spend money upgrading your speakers, amplifiers, then you put a computer in to play music. After that you realise that your mp3s all suck, so you spend time reripping them all, and buying a larger hard drive for your car computer..
Then you realise that your cd player at home sucks, so you buy proper amplifiers and proper speakers and spend more money on things like cables and other interconnects.. and it just keeps going and your wallet keeps getting thinner....