Unfortunately, you are correct - judging from the link you provided, there are no Palm OS 5 devices that are compatible with the datalogging system, and for the actual Palm brand, anything older than OS 5 has absolutely no chance of being a usable music player.
There is actually one Clie on the "compatible" list which is not OS 5, but has special additions so that it can play back MP3s. However, not only are all Clies discontinued in the US, but this particular model was gone for quite a while even before that. If you're certain that this is what you want, you'll probably have to get a used one of those (there are used ones available at that link). You can pretty much expect that future (and even current) software for Palm OS, as well as Windows software for working with Palms, will completely neglect that Clie, since it's "ancient history."
You will also have to find a car stereo that accepts a standard 3.5 mm headphone minijack as input, since the only audio output port that that Clie has is a headphone jack (which also isn't the highest quality). Many iPod docks and cars use the iPod's Dock Connector, and there is even a product like that for Palms with the Multi-Connector.