It's eminently possible to get a very decent sound in a car. Over the years I've tested dozens of car installations carried out by both mainstream manufacturers and aftermarket specialists (I'm a guest expert on the What Car? site right now, in fact) and the audio specialists I've interviewed over the years have some surprising views on car audio.
First, the advantages. As an acoustician, you're dealing with a constant volume (the car's interior), which doesn't vary, unlike living rooms the world over. You're aware of the material construction of each boundary - again, unlike living rooms, which could be brick, wood, lined with drapes or completely reflective, depending on the home. And you know, beyond doubt, where your speakers are going to be placed within that acoustic space (sometimes, with less-than-ideal results, but at least you know, and so can work around it). You also know what the partnering equipment and wiring for your speakers will be.
The disadvantages are obvious, of course. First, you're fighting against a noisy environment: it's no accident that the most impressive in-car hi-fi systems I've heard have been fitted to the quietest cars. Second, your driver is unlikely to be sitting in the ideal spot: he or she will almost certainly be too close to the right-hand speakers, for starters. And third, few (if any) of the component parts in most car installations are worth a light: the drive units are massed-produced and cheap, the amplification is low-grade, and the head units are functioning sources, but little more. Incidentally, several designers I've spoken to swear blind that integrated CD/DVD/sat nav systems sound worse than dedicated CD head units, which makes sense, even if it also seems a little extreme.
Anyway: if you're fitting an aftermarket system to your car, you need to see a specialist. With your budget, you'll be able to get something very, very good indeed, no question about it: i'd expect you to get replacement drive units, Dynamat acoustic resonance damping in the doors, better power amplification, a higher-quality head unit and a standalone crossover, plus (probably) a dedicated subwoofer enclosure in the boot. And I'm not talking about a thud-thud-thud boom box: I mean a proper subwoofer.
I'm not here to sell to anyone, as you know, but last year I carried out a big What Car? test piece, part of which involved getting an upgraded system installed in a Ford Focus. I contacted BBG Distribution (http://www.bbg.eu.com/incar_division.html, 01923 205610) and they put me on to a local dealer who specialised in installing their kit. I suggest you do the same.