I am using the Archos 5 Internet Tablet with 500 GB and 5 inch touchscreen now for two weeks in my car. It does come with Android 1.5 plus some custom media center app from Archos.
It is very usable in a Car environment believe me!
However there are two things that are not ideal and therefore a Car OS app would be great:
a) Using Copilot 8 as GPS navigation does not allow to run in background. As soon as it is not the frontmost app, it wont announce next turn or next speedcam (very bad) instructions anymore. The app itself is way better than anything seen on Windows basis
b) The Archos media player app is good for music, video, radio etc. but it needs the integration of other things. A fronted allowing to embedd others (i.e. Copilot) such as Road Runner would be great.
Regarding the size and easyness of the install, packaged with 500 GB, bluetooth, GPS, Wifi, fm and dvb-t in one device and a battery to allow it to run if engine not on and not sucking your car's battery IT IS A BIG THING!
Software comes always after you got the right hardware. Now it is upon us to code the right app for Android