Hi big.al
I have done exactly as you are thinking - I use the Garmin 12XL (fairly cheap GPS) linked to the RS232 serial port of my laptop. I use Jeppesen Flightmap, this gives me moving map as well as being extremely useful for the flight planning. Remember as well it will log your track so you can review flights - very useful when doing IFR practice.
You cannot really beat the level of detail the display provides however you do pay the price in terms of having to set it up somewhere. If I am solo then I use the RH seat otherwise it can go on the floor at the front where I can still see it. I flew to Menorca and back with it in that position with no problems.
Points I feel are worth making are:
1. As msmorley said, battery life is a big issue. Even if you have a decent Li-ion battery you will find you need to supply external power somehow. I use a standalone sealed Pb battery (12V) - this way I have total independence from the a/c power - handy if I lost the electrics in IMC
Most lappys which are supplied at over 12V by the charger will run from a 12V source - the internal battery will not recharge though. You can even make up a cable which links power and data between the power source, GPS and computer. If you do use a separate battery make sure you fit a suitable circuit breaker close to it.
2. Given you are going to be space constrained I would suggest a 12" screen. You will probably pick one of these up 2nd hand for a couple of hundred pounds.
I have found that my laptop has become indispensable when I go places - I can access the internet via the mobile phone (expensive abroad though), download the digital camera onto the hard drive and even play games / music
Let me know what you decide to do. Will happily advise further if it helps,
Fujiflyer