It is actually amazing how much time can be used staring out the window.
Yes! I do that all the time! I get a book out, then start staring out the window. Suddenly, twenty minutes are gone. :P
Anyways, I bring a book to read, some portable electronics (DS, laptop), and maybe one of my puzzle books (though the car's bumps make it hard).
If you're looking for something to do when already in the car, I'd say stare out the window, look for certain signs, count something you see (cars of a certain color, slug-bugs, etc.), or talk to someone.
If it's a long car ride I'll bring my laptop and/or PSP to get on, take a nap, stare out of the window looking at things, or just have conversations. If it's a short car ride, I'll just sit there looking ahead or out the window, depends on where I'm sitting.
Every year I go on a 9 hour trip to Pittsburgh and I do these things: -sleep (when I leave early) -look outside -get comfy -Do schoolwork if I need to catch up -play a handheld video game -eat (I'm hungry now, so it came to me) -watch a movie -talk -listen to the radio -doodle -text friends (if you bring a cell phone) etc.
I'm just back from vacation which involved too much time in the car. I usually just make myself comfy, turn my mp3 player up full and drift off to sleep while listening to music. Or spend some time admiring the view.