From the patent abstract:

A car stereo including a docking station into which an off-the-shelf handheld computer can be docked, and including an input/output (I/O) component allowing the car stereo to communicate with the handheld computer when the handheld computer is docked in the docking station, the car stereo indicating to the handheld computer, when the handheld computer is docked in the docking station, which one of a plurality of different appliance types the car stereo is.

Via Electronista:

Docking the device could change its display to serve as a replacement for the stereo's native interface, controlling both its own local files as well as those on the stereo. Using the handheld this way would take away the clutter of an external docking cradle, Microsoft says; though unstated, it would also let owners guard against thieves by removing the main screen and even storage for the stereo.
The patent primarily includes PDAs and smartphones in its patent, suggesting that the immediate intent is to use the technology for Windows Mobile devices rather than media players. However, the patent is generic enough to include most any "handheld computer," according to Microsoft's definition. This could include the Zune and other jukeboxes, which could use the advancement through a software update.

 Some figures from the patent No 7,222,207 (22 May 2007):

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