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You may want to rethink using apple TV in your car. I am huge ATV fan, have one in every room, but all the attempts I have made to install them in my car have left me less then satisfied. The problem is that the ATV just doesn't like having it's power turned on and off frequently, as happens in a car environment. This impacts the 1G ATV more then 2G+ ATV, but even with a new ATV it's still a difficult interface to use considering you need to extend the IR remote and keep a screen running to see status.
You may want to instead consider using a iPod touch. Very similar feature set to the ATV, but it works much better in a portable environment like a vehicle. DC power options are readily available, plus it has it's own battery for use when the vehicle engine is not running. Also the fact that the screen and controls are built in are easier to deal with when setting up and using.
Just 2 cents, good luck.
What do you mean by it doesn't like to be on/off?
Also, iPod touch can't airplay and this is the main reason I want ATV.
As of remote, I will use iPhone app since the vehicle will have a WiFi router as well.
The 1G ATV can definitely be damaged, the later version it's more a matter of usability. For example, lets say you setup some movie or audio and it's playing, and you stop to get gas, turn off your car, when you start it back up your ATV basically resets. After boot-up, You have to re-navigate to whatever you were doing and then seek to the last "scene" you saw. When you have young kids who's cartoons just got shut-off it's a disaster.
Not having any local storage is another issue. You would need to have a wireless network in place and have another source to stream from. This can be solved by hacking the ATV and using and external hard drive but it's still less then ideal IMO from a form factor perspective.
The HDMI only output can be tricky unless you have very high end video monitors in your car.
iPod touch 5 generation can now natively airplay. Earlier versions can be hacked to use airplay. But if you are gonna hack it, you wouldn't bother with airplay anymore, much easier to us DLNA based protocols.
Wifi only remote, in my experience, is problematic. You still need the original remote to setup the wifi remote and I don't find it very reliable in practice. When I do use wifi in the car I use it with my Verizon Mifi hotspot, I see the bigger benefit being mobile data access versus in car wifi.