Thanks for the comments guys, I want the best of both worlds so here is what I am going to do:
Mount the MDI unit in the end of the dashboard on the passenger side, then I'm going to buy a 32gb ipod touch gen 4 from eBay, probably with some kind of defect to keep the cost low.
I shall velcro the iPod to the MDI in the end of the dashboard and I will sync it wirelessly so I don't need to remove it from the vehicle - but I can easily get it out if I need to.
Pros:
Not sliding about in the glovebox.
Not losing armrest cabin space.
Easy install.
The only thing I'm wondering about is whether I can sync wirelessly whilst it is connected to the MDI, if I can't that's a bit of a problem.
Will let you know how it goes.
Cheers,
D