Do it all the time - never chuck a tent up these days unless it's a few days stop. I have a small roll mat which is always in the car and a sleeping bag, bosh the larger back seat down, headrest out, turned round and back in again as a pillow job done. takes about 10 mins either end. I specifically will only buy a car with fold flat rear seats for this reason!
Only minor issue is when it's raining - then water gets through the open window but i normally just open the back window where the bikes are a bit so it's not a massive issue. I keep meaning to get wind deflectors cos that means you can crack the windows without worrying about it.
The only thing i'd say is try not to do anything to avoid condensation towels etc, wiping - just give it 10 minutes to air out the next morning if you do get any. Obviously crack a window and lock the car from the inside and don't alarm it. My new car is a bit of a pain, as when you have finished with music etc and turn the ignition off to go to sleep, you have to open the drivers door and close it to kill the car, and then every light on the bloody thing turns on and illuminates everything around you... can be awkward on a campsite!