German magazine Focus is claiming that Apple is working with Mercedes on a car navigation and sound system that will be introduced in 2009.
The system is reported to include navigation, communication and maintenance. Mercedes will exclusively offer the new Apple system for six months (presumably followed by other auto manufacturers). The article also mentions the possibility of Google maps being the source of navigation data.
You can read a translated version of the article here.
While this story is primarily a rumor at this point, it is easy to see how Apple could use technologies already available in current products, like the Mac mini, iPod and AppleTV, to build such a system.