Though it's pretty normal for the phone to get hot using the GPS and radio (probably music too for most people) while sitting on a really hot dash in the baking sun, with no airflow around it.
What will happen is the phone will stop charging once it reaches a certain temperature. GPS, charging, sunlight...all increases the overall tmp of the car. We were on a couple hour drive when I realized the phone was down to 30-40% battery life. It took a bit to realize the LED wasn't lit up where the phone was plugged in. BatteryLife, a free widget, displays whether or not the phone is charging or not, along with temps. I had to hold the phone in front of the AC before it started charging again. As we were doing highway driving I left the phone out of the sun on the middle console for most of the trip. With no upcoming turns for 100 miles I didn't need to see where I was at on the highway.
This happened once to me on a long drive. Shut my Droid off and stuck it in the console to cool before charging while we used the better half's Droid. Helps to have a spare.