Can you check with the GPS turned off for a while?
I've heard reports of heating and restarts most of which refer to multiple things being active increasing current demands from the dock.
Here are a few references,
- N1 heat issue while charging + GPS? at the nexusoneforum
- Nexus One is overheating in car dock, becoming unresponsive (google android forum)
here is a quote from the second link,
have use car dock overheat problem before, But I solved the problem now! The car dock 12V to 5V adaptor it can provide max. 2A current maximum, the phone voltage is 3.7V, when you use this adaptor direct connect to the Phone Car Dock, the phone begin charging, the charging current supplied by car adaptor, if you at same time your phone operating like navigation (GPS, Data) or video streaming and just not the screen off , this time the phone's power provided by car adaptor through the phone itself, therefore the current = charging current + operatin current provided by car adaptor.
This probelm very easy to solve, you just need to buy USB car adaptor from car accessories shop, the USB car adaptor maximum supply current not more than 1A or less, and then buy a micro USB cable connnect to the car dock body, the overheat problem have been solved.