I have both a handheld and car-mounted GPS, so I'm spoiled. It would be very difficult to convince me that there's a handheld option which works just as well for auto navigation.
I'm using a Garmin StreetPilot 2620 in the car. Originally it had a 2 gigabyte microdrive on a CF card, but when prices dropped I replaced the microdrive with a solid state 2 GB card and that really improved performance.
I don't think there are any handheld units that offer this amount of storage (although new products keep coming out, so I may have missed something). I have the full North American street maps loaded, and have loaded the US Topo maps for maybe half of the US and there's still room to spare. This is really nice when you go on a trip, you can easily toggle between topo's and street maps.
I don't think any of the handhelds have screens as bright and readable as the streetpilots either (it only runs off a power cord and not batteries). Additionally, the touch screen interface is very handy in the car. And they also give you a wireless remote control which lets you control the unit without leaning forward to physically touch it.
The Quest is supposed to be designed for auto and handheld use, but I've never seen one in person. Still limited in terms of storage however:
http://www.garmin.com/products/quest/
Now of course a handheld may be "good enough" for your use in the car, but I don't think there's any way it will be "as good" as an automotive unit.
FWIW, I have a Garmin Legend C for handheld use. It's a nice little unit but I definitely wouldn't find it adequate for replacing paper maps while driving.