i beleive that your idea for powering it is correct.
there are 2 different types of audio jacks on the system-- digital, and analog-- you are right that you could use a y-adapter to split the signal from this jack. depending on how the computer chipset is though, it might only allow you to do 2 channel sound using the analog output(if it does not allow you to reassign the jacks to different features).
the sound quality should be 'adequate' though i have been seing some posts from other members using onboard sound on other motherboards and being less than happy with the output level, and overall quality. in this case, you would wnat to get a sound card.
not sure what you mean by "what do headunits put out in stereo?" could you try to explain a little more?