I wouldn't go linux, I would go with XBMC.
You are going to need a laptop hard drive in place of the Xbox hard drive as those aren't really meant o be in motion when spinning like they would in a car.
Same thing for the optical drive, you should get a laptop CD/DVD drive since the one in the Xbox is not supposed to move while the disc is spinning. 360 disc scratching, anyone?
As for the touch screen... I would can it and go with either a wireless controller or remote control... cheaper and will be just as good/better because you can game too

(obviously not WHILE you are driving though)