I am using the Vizualogic headrest screens and am very happy with them. I compared them to the LZ-800 I have in other vehicles, and did not see a lot of difference. Plus the fact that they keep a clean factory look.
For the passengers in the back, I am using an Audiovox 10 disc DVD changer as one source, and a PS2 as the other. This gives the kids the ability to play games, movies, tv or a combination. I put a 10" Rossen drop down screen for the rare times they can agree on the same thing (better for the 3rd seat as well). Get the Fm modulator, but also the Audiovox wireless headphones. They are a godsend on road trips!
Whatever DVD player you use, make sure it has memory. Audiovox makes an inexspensive unit that does not have this. Each time you turn the car off you have to use the menu to return to "that part" of the movie.
Have fun with it.
Cheers!