Have you thought about a regular PC?
I've been looking at that for a while now. There are cube systems, not bigger than game cube - with video card on motherboard. Recordable DVD drive would be nice touch, and the whole thing could cost around $550 plus LCD.
The reason why I do not look at notebooks yet, is that it is too easy on some part, and too hard on the other - docking station means it will be on display if you want it or not. Cube system would be very neat with set of those mini keyboard and mouse, possibly wireless, what makes it easier to work with when LCD is mounted on/above the dashboard, and you can pull keyboard from glove compartment, having the system underneath it, or maybe behind passenger seat.
Here is my problem; I do not want to wire it to car's electrical system. I'm toying with "portable" idea, maybe a battery... I do not know exactly yet.
About navigation... I would have to look into software, what's out there (maybe someone knows and would like to share), but for now I was thinking that cell phone with Internet access would do. Those things change so fast; I guess everything should be possible soon.
That's only from the top of my head... let me know if this is helpful, maybe you can pitch in to the idea too.