The vast majority of LCD displays of the type pictured above are of a transmissive nature. In other words, light produced at the backlight panel shines through the display plane to your eyes, however incident light striking the panel (eg: sunlight) just gets soaked up in the thing and doesn't contribute much else.
Think about an older, monochrome LCD display, like on a digital wristwatch or the very old Tandy model 100. Those are reflective displays. Some have a backlight as well, but the primary illumination is ambient light passing through the screen and being reflected back. These panels have excellent viewability in sunlight.
A hybrid design exists, generally referred to as a transflective panel. These are obviously sort of a compromise design, not nearly as good as a plain ole' monochrome display, but still a great deal better at handling incident light than 99% of common LCD panels. They're fairly popular amongst the in-car PC crowd, and I have a fairly old unit (which was based on an industrial 7" Liliput display modified with a new reflector) which I used in a Miata project. Even with the top down on a sunny day, it wasn't totally impossible to read.
Here's an example of a current-gen unit already modified for direct-sunlight use: http://store.mp3car.com/mp3Car_com_7_Sunlight_Readable_Touchscreen_Monit_p/mon-052.htm I can't vouch for this specific one, but if you browse around the relevant forums for this sort of thing, you should be able to find some reviews and opinions.
