CNET offers a first look at a prototype interface in the works at Volkswagen called Gypsy. A computer in your dashboard, it provides a user-friendly way to connect a number of electronic devices including the Apple iPod.

Gypsy’s interface and underlying technologies will pull various systems together that will can be accessed via the car’s touch screen. For example, once you connect your iPod in the included slot, it will act as the audio application for the VW.

Then by viewing the large LCD touch screen, which is installed in the car’s center console, it will display the familiar playlist, genre, artist, and album details as you see now on your iPod. Except you now control the iPod entirely via the touch screen interface.

There’s also an audio jack, Firewire, and USB interface. Other devices — like the Palm Treo — can be connected via Bluetooth, and the demo showed how it can act as the email device for the car without ever touching the Treo. Other cool things showed how widgets can even monitor and control home-based electronics.

It's still under development, but it looks pretty fun. Check out the CNET video here.