Here is a diagram of the simple music system I used to have in my car:
MiniDisc was created by Sharp and Sony. It uses a form of compression called ATRAC to squeeze 74min of music (the same as normal CD) into a disc under half the size. The problem with this is that you lose a small amount of definition in the playback (as there are losses from compressing to store music, to uncompressing for playback). However, with the latest ATRAC (the HU uses 4.0, my old home deck used Type R) such small losses in quality can only be heard if you're using a dedicated set of separate hi-fi components (i.e. at home). This means that there is no difference when listening in a car, MD sounds as good as CD (i.e. both use 16bit 44.1kHz encoded raw data, whilst my home deck used a 24bit DAC and ADC).
The reason I originally chose MiniDisc is that it's very easy to record digitally from CD. If you burn a CD and afterwards either don't like it or don't like one particular track, you have to throw it away and burn a new one, unless you've spent £10 on a re-writable disc (something that not all CD players can read). However with MD I could simply re-edit the disc any way I liked, and record over it up to a million times with no loss in quality. The discs also only cost about £1 each for a decent one and have better shock resistant properties than CD.
The reason I chose Sony is that they were the only company making a reasonably priced 6 MD changer at the time so I needed a Sony HeadUnit for compatibility (I got the changer for £185, the nearest other make was the pioneer 6 MD changer for £450 which is only sold abroad - the HU cost only £235).
My Rockford Fosgate Sub supplemented 20-40Hz frequencies that are lost in car (it's in a 36l / 1.27ft³ ported enclosure with a 4" port tuned to 40Hz - only switched on if on the motorway). You can view the characteristics of the RFZ1412 subwoofer 
('pdf' file & therefore needs suitable reader to view).
This was my second car and therefore my second attempt at altering the bog standard radio cassette (my first car also had a Sony MD Player headunit - the MDX-C7970R). The most difficult part was routing the wires under/through the upholstery. My advice is, if you're feeling adventurous, don't waste £250 odd (what I was quoted) having it installed for you, read a 'haynes' manual and save yourself a couple of bob.
As the sound inside any car is compromised by road noise anyway I've now grown up, chucked in the MD/sub system, and use my iPod to conveniantly have 3230 songs on the move (the 2 things I've added are separate to most of the system which was factory installed):
Here are some ICE links:
26th September 2000