I just got the 'Life on Mars' 2007 Calendar that's now in the shops,
and started looking up stuff about the show on the Web. Some of the
lyrics to the David Bowie track might explain what's happened -

"Look at the lawman, beating up the wrong guy,
 I wonder if he'll ever know,
 he's in a best selling show,
 is there Life on Mars?".

So what I think is going on, instead of hallucinating or travelling
back in time, the protagonist is actually in a TV show, the one we've
been watching in fact, having regained consciousness after being placed
in a different car following the crash.

Perhaps we'll discover this at the end of the second series?