I would consider myself an active member in the xbox modding scene having modded 25+ xbox's and i personally wouldn't see this as a practical carputer for the following reasons:
1. It's extremely bulky, if you open up and xbox its a full size mobo with a fairly big psu, full dvd-rom and full-size hdd, by purchasing the parts or even a case here you can create something much smaller.
2. The xbox isnt that fast of a pc, only 733 Mhz I believe, most of the carputers people are running here are 1Ghz+.
3. Poor compatability. Its true that you can run linux on the xbox, but as far as I know its far from a full distro, I haven't check it out in a while though so it may have changed, but I would imagine you would have some issues getting it to work with the appropriate drivers and such required in these carputers. I run windows 2000 on my carputer and still have issues with my drivers.
I guess if your goal is to do a dual boot on the xbox meaning have the xbox be playable (modded) and also be able to boot to linux this would be a pretty interesting idea. 1 box 2 functions. But personally I feel the xbox would be a pain to turn into a carputer. I'd fork up the cash and get some real PC parts, and go with a windows distro to save headaches. If you've never purchased carputer parts before im going to recommend not straying from this site. I've order elsewhere thinking i was getting a deal and I've always came back and bought the same part again here...
Hope this helps