The new firmware upgrade for the 5th gen ipods allows gapless playback, so no worries there. Just plug it into itunes and it'll ask you to update. If you have a library the size of mine (nearly 50gig) it takes bloody forever to update it + the ipod to gapless playback, but it only needs to do it once
As for hooking it up to the headunit, im not sure. I have just bought and installed a new pioneer 6800 MP with the adapter that allows you to control the ipod through the head unit. In theory though, any headunit with an aux in should be able to play from an ipod if you get the correct lead. I have seen some stuff in car audio places that have controls for the ipod on a seperate stalk etc. Im sure theres a way to do it, just poke around a bit