If you're using your computer for music and nothing else I'd go for a character display, but to each his own. I like them because they're less expensive and take up less dash space.
If I go for GPS someday, I'd probably want a stand-alone unit anyway. Heck, if they made an economically priced stand-alone mp3/wav/etc unit that suited my needs I would've bought one a long time ago and been done with it. But again, to each his own.
As for size, you'd know better that I. It's just a matter of figuring out what you want displayed and picking out a display that's sized appropriately. For me a 20X4 display was more than adequate.
Feel free to take a look at my homepage (or any of the other user site) for ideas.
http://techworld.dyndns.org
As for examples of DOS-based systems with color displays, I can only remember one off the top of my head: Gutter's old system. Here's a link to his homepage:
http://www.dynamoeffects.com/impee3
Hope this helps.