The memory card only holds the operating system. All music is held on an external drive (2.5" hard drive or MP3 player) that is brought inside when leaving the vehicle out in the cold. I have 80GB of music/movies on mine. If you already have an MP3 player this is an ideal option.
A 1GB Sandisk Extreme III card is fast and good for extreme cold temperatures. I do a cold boot in under 30 seconds. 1GB easily holds an OS (my XP install only takes up just half of the card). This card can now be had for ~$50-$60 USD. An IDE->CF interface can be had for ~$10 or so. IMO this is your only option if you want to have a reliable CarPC for half the year. What other option is there for a cold-proof install? I'm not aware of one.
The LCD has handled the cold without a problem. It is slow to respond initially but within a couple of minutes doesn't hesitate. I have a Xenarc.
I'm also at the university in my last year of undergrad
Edit: One other option is to boot from a USB drive. I didn't go this route b/c my motherboard cannot boot from USB.