I saw a thread from a few years ago on creating a software implementation to allow a CarPC to be hooked-up to a car stereo and controlled via the head unit. I've also pondered the idea and finally our portable DVD player broke so I decided to do it.
The code is not very mature and not ready for non-developers. Most features work but more still needs to be done before its ready for non-developers.
With a video display hooked up it can also be used as a video player. The backend uses gstreamer for audio/video playback.
You can find out more here: https://code.google.com/p/beaglepod/wiki/BeaglePod