Yeah, I saw a few forums that mentioned y-cable capability. At that point though, I came to the conclusion that any additional sound quality that provided would be lost as soon as my car was started (my car is LOUD). I'm sure that by the time I buy a vehicle that has a quiet enough interior cabin to take advantage of the sound quality of an external doc, someone will have made the process a breeze!
As far as an external DAC is concerned, I can't really provide a suggestion without knowing all about your setup and what would suit you. For example, for my setup, if I had a digital output from my tablet, I'd definitely buy a Rockford Fosgate 3Sixty.3 because it has digital input, and allows for a completely active 4-way crossover network, which I require. You may not though, so the 3Sixty.3 might be a bit overkill for you. Basically when it comes to DACs, the sky is the limit, depending on how much you want to spend. The most popular are the Audison BitONE, 3Sixty.3, and the JBL MS-8, but there are many more. My main suggestion would be to stick to external DACs that are designed to go in a car, such as the ones I mentioned. I don't know how well a "home dac" would do in a vehicle full of EM interference.
With regard to external mic functionality, I'm not sure if the tablet would support the built in mic connector while using an external DAC or not. It's hard to say without actually testing it.
Also, you might be careful in your tablet decision if you are going the route of USB OTG. Last I read, the Nexus7 doesn't even fully support the OTG protocol, while the Galaxy Tab2 does.
Look into APT-X technology as well (LINK). Most new tablets coming out are starting to support the technology, and it would allow you to use bluetooth to wirelessly stream up to 24/192 quality audio to your amplifiers via a APT-X dac such as THIS ONE. The equipment is pretty expensive right now, but it's a new protocol, so I'm sure the prices will go down in the new future if/when the protocol catches on.