Undoubtedly the garage is the biggest room in the house. A typical 2-car garage is about 400 - 440 square feet. A decent recording facility CAN be constructed in a garage. John Sayer's, a professional studio designer, frequents this board and offers much advice in this arena.
Have a look at this site and see how he modifys a garage for home studio use:
http://www.saecollege.de/reference_material/pages/Variable Plans.htm
Logisticly, converting a garage poses several problems, some of which you mentioned.
There's a HUGE opening at one end! That has to be re-constructed.
Most garages are not insulated, and to be comfortable throughout the year, for you and your equipment, they would need to be. They also need to be heated and cooled. The garage would add about 3500 cubic feet of space, and the existing Heating/AC unit may or may not be adequate to do that with out over working itself.
Many garages have the electric pannel inside of them, so electrical is probably easier to deal with than you'd imagine.
I think the biggest advantage to converting a garage is you already have the room, the roof, the floor and the electric. All you really need to do is build a room within that.
I think the biggest disadvantage would be the HVAC, and the open end that has to be reconstructed.
