Im going to make a system for my car, mainly a MP3 jukebox, and will control it via a PDA on the dash Probably been done a few times here, but it fits what I need for my car perfectly.
I've been thinging about the car pc thing for sat nav and mp3 playback and xlobby is an obvious glue to integrate evrything but I was thing along the lines of a regular touchscreen, I'd not thought of using a PPC, obvious now you mention it because it works great around the house.
I installed xlobby on a integrated via 1000mhz cpu/mobo 256mb ram combination for my folks and other than traking a while to boot it worked ok. This is the equivelent of a p3 650 ish processor so very low by todays standards.
I use an old dell axim also with a compact flash 802.11b wifi card. A 400mhz pocket pc with a wifi card should be fine. I dont know if you can get an 802.11g yet on a pocket pc but I would go for that, because from my experience the actual bottle neck for the pocket pc client is the transmission speeds. And someone asked about bluetooth, I remember a guy trying that and its was slooooow and the range was poor.
I just picked up an HP iPAQ rx3115 from Circuit City for $299 (open box, normally $349). A good deal for a unit with 802.11b and Bluetooth built-in. It runs Windows Mobile 2003.
I'm setting everything up now, and, I am finding problems with Pocket IE (unsupported stuff such as image links and some JavaScript not working).