In a word, yes, although most people may just choose to bring their iPads when they drive rather than leave one mounted in the car.
That's not to say some car manufacturers aren't considering tablet-like interfaces for cars. The Tesla Model S will have a large touchscreen device at the center of its dashboard (pictured below with Google Maps).
The most obvious use for an iPad in the car is the Google Maps application. For this to be effective you'll need to purchase one of the iPads with 3G and GPS and give AT&T $15-$30/month. The maps application works just like the iPhone's, but it's bigger and faster with a terrain option. There is also a compass which makes navigation and the higher definition street view that much more functional. GPS software makers like Tom Tom and Garmin might also make special versions of their current iPhone apps for the iPad, otherwise, you can get by with the iPhone formatted versions.
But there are many other uses for the iPad in the car.
Videos. Rather than install LCDs in the headrests of cars for thousands of dollars, why not just get a few iPads? While they won't play TV without some third-party equipment, they do have 16-64GB to fill up with videos. If you have the 3G option, Youtubing in the car becomes a real possibility. What's better for kids -- interacting with a device or staring blankly at a screen for a few hours a day?
Tourism. The iPad's browser makes finding points of interest even better, for times when the maps application doesn't offer everything you want. It is also the only way to use Google Latitude on Apple devices.
Calendar. How many times do you put driving directions for an appointment in your calendar? Nice to have that at your fingertips.
Addressbook and Facebook. Look up your friends' addresses when you are trying to find them.
Food applications like Urban Spoon and Local Picks help you find the best restaurant in the area you are in. That's useful in a car.
Pandora, NPR Addict and other radio apps are better than terrestrial FM radio just watch out if you don't have the unlimited plan, as this can be a data drain on your 3G plan.
Time wasters. There is no shortage of web browsing, game apps and general time wasters for both adult and child passengers (who don't get car sick) as well as for drivers who are parked and waiting.
Books. Both audio and eBooks would also fit into the time wasters category, though I'd hardly call reading a good book a waste of time.
Assistance. Though this is a bit of a stretch, the iPad with 3G can also serve as another level of protection if you find yourself in need of help. Perhaps you have an out of service mobile provider or a dead phone battery and you need to contact someone. If the iPad has a signal you can use it to email people or possibly use VoIP to call someone. You can also access information on CPR and other lifesaving tips via the browser - just like this guy did in Haiti with his iPhone during the earthquake.
So will, the iPad be great in the car? I think so -- but not in the built into the dash sort of way. It will be something you bring with you on trips, and like the iPhone, may have a mounting place inside your car.