I am using linux, it's a fairly standard (for me) install of 7.0, I kept it standard as I want to be able to recompile my software on the box. It take about 250-300 mb in total (I think).
I wrote custom software using the xaudio linux sdk, it plays mp3's, interfaces using the parallel port (custom buttons and a parallel port Noritake VFD), it also can control the Express FM radio card I have in there. Soon it will have rudimentary gps abilities.
It intercedes the boot process and gets to playing after 20-30 seconds.
Copying music onto the system is another deal and I haven't figured out how to do it right yet, I currently have to bring the player into the house and copy them by hand and then integrate them into the database.
For more info, check my site at http://cowshed.8m.com/car.