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if your ultimate goal is to play MP3's and DVD's perhaps you should look into readily available HU's by the big manufacturers. I think that the only reason to go with a computer is if you want to maximize the usefullness that it can provide. You should perhaps re-think if you want to bother with going through the hassle of collecting everything needed and configuring the system to what you need.
If you're set with a carputer then the ones provided by MP3CAR will put you ahead of the game. The one that you provided in the link already comes with a power supply. This would be connected directly to your battery via a fused wire and your ACC line to get the signal to turn on.
2. The XP provided will need to connect online if you want to get the updates. Validation would occur at that point. If you're never going to get the updates, you'll never have to connect to the internet and you'll never have to validate it.
3. The MI10000 is used by many of us. It's no super computer but as a starting point it will get what you listed done.
Again, you might want to look into the headunits by Alpine or Pioneer cause they have pacakages suited to playing mp3's and DVD's for a lot less than what you'll need to put into your carputer.
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