If you're not going to be running anything that requires text (ie GPS), then something that size will be Ok for displaying MediaEngine/MediaCar etc. They are designed for those type of screens.
With that size it will not be VGA, so to judge whether you are going to like the quality, hook up your computer to your standard TV and walk backwards until it looks about the same size that a 5.6" screen will in your car
Garry