I have a 5500 and I'd like to buy a used iphone to leave in the car hooked up to the radio. I'd tether wifi to it from my other phone. Anyone tried doing this?

Only reason I'd prefer a phone over a touch is for GPS navigation.

That should work fine. I've used a touch in a Magellan car kit (has a built in GPS antenna) tethered to an android phone providing wifi to access the map data.

It will work without issue.