I've commented on various iPAQ based options before which will probably come up if you search this forum for iPAQ.
If your iPAQ supports Bluetooth and you're feeling flush (with cash) get yourself a Bluetooth GPS. This is a tiny wireless GPS which will provide the position info to the iPAQ. Otherwise any GPS will do, but I'd recommend an external aerial if the GPS itself is not going to be in a prime position (external to the device, not external to the plane, though that would be better still).
As for software, AnywhereMap is very good. However, as Chuck mentions, the European database is pretty terrible. They've been promising for ages that a new one will be available soon, but as it stands it is very poor for use in the UK. Plenty of popular UK GA fields are completely missing and the database is out of date so much of the airspace and frequency stuff is wrong.
Another alternative is the CAA charts displayed in MemoryMap software. These are identical to the 1/2 and 1/4mil paper ones and it works really well, provided you have the storage space (I think the 1/2 mil is about 50Mb and the 1/4mil double that obviously). You also get loads of airfield diagrams. However, it isn't great for route planning, for which something like AnywhereMap is better.
As I've said before my personal favourite is an iPAQ with the CAA maps and a Garmin 196 for navigation. If you use this combination you can use the Garmin as the position device to feed the iPAQ.