This past weekend I finally got around to using a very cool, and possibly unintended, feature of the Nexus One's $55 car dock. There's a large open space in the back where the phone's 5-megapixel camera can poke its head out. I'm assuming hardware maker HTC did this to keep from obscuring the nearby secondary microphone (which is used for noise cancellation), but the result is that you can still use the camera app freely--even when it's in car mode.
Sure this can be a little dangerous, but only if you're fiddling around with it while driving.
In my brief foray, the results were good. I shot three videos, each at around five minutes long, and one of them (which is embedded below) turned out quite well. Part of that success-to-failure ratio was that the road I was on for that shot was smooth, and I was only going about 25-30 miles per hour. The camera didn't do quite as well on freeways, where constant vibration and frequent bumps led to a rolling-shutter effect. If your car has a softer suspension it will probably fare better than mine.
The other problem was that shooting with the phone in portrait mode ends up giving you sideways video. This is an easy fix in a video-editing app like VirtualDub or QuickTime Pro, the latter of which I used before uploading my video to YouTube. As an addendum to that, if you're thinking of hosting it on YouTube, you can use the site's tagging system to crop or alter the video player's aspect ratio to fit the extra-tall clip. I ended up just cropping, which was the easiest way to get my dashboard out of the shot.