So, on the question of "how much to spend on a car audio system", is it possible to get such a truly engrossing sound stage that you can't pinpoint the location of the speakers?

In a word... Yes.

In IASCA competitions, everybody has to play and be judged on the official IASCA CD. Part of the process involves the judges using a diagram of where the individual instruments were located when the tracks were recorded. You will lose points if the placement of the sound from your system (known as imaging) does not match the diagram.

One of the tracks is a series of seven drumbeats that march left to right across the front sound stage. Ideally you will get a placement that looks like

#......#......#......#......#......#......#

Most systems will sound like

...#..#..#.................#..#..#..#.....

or a mirror image depending on whether you are in the passenger or the drivers seat.

[bragging]
The sound stage in my car sounds like it is evenly spread from left to right about halfway up my windshield -- including the subwoofers.
[/bragging]

It took a lot of money and a lot of tuning to get there.

tanstaafl.