Looks like a sweet location for the install. You should also consider that the carputer can be used for your mp3 collection.
You'll of course need a GPS receiver and the software to run with it, so factor this in to your costs. Otherwise $700 seems like a fair deal for all that.
Where are you planning on mounting the external drive?
You also want to consider whether you can plug the audio output into your head unit or not, or if you'll have to run it through a separate amp.
1) It won't require more upkeep, but you may find that you can't stop tweaking it. Its not a small project to undertake (mostly wiring problems), but since your friend already has the system put together for you, most of the computer setup work is probably already done.
2) As far as extreme temperatures, people are running their carputers in far hotter and colder places than NJ. Keeping it in the main cabin (under seat) can help reduce temperature swings to a certain extent. Shouldn't be too big a problem.