I have an 06 Legacy wagon, which is quite similar to the Outback in interior design, if not practically identical. I *love* it. Subaru makes some of the safest cars on the road, and yes, the side curtain airbags are safe for children in harnessed seats. (That was one of the selling points for me--there are not that many station wagons with side curtain airbags for rear passengers. A newborn or older baby in a rearfacing seat is unlikely to benefit from them too much, but they're still good to have.) If you keep your cars for a while, you might also like to know that Subaru allows its LATCH system to be used to 60 lbs, unlike the 40 or 48 lb limit in many cars.
Now as for installation, I've never used an infant seat in mine, but have used rear-facing Roundabouts and Marathons with no difficulty. The Marathon does fit surprisingly well rearfacing, even with a tall driver. And it's an awesome fit front-facing.
*But* my Legacy manual recommends against center installations for carseats. It allows it, and has a top tether anchor for the spot, but it's not easy to get a good install there. I think it's possible to get an infant seat in the center position, but most definitely try it before you buy. (Both my girls ride in the outboard spots, and I am very comfortable with them there, given my car's outstanding safety ratings. The Outback's ratings may be slightly lower than the Legacy's, mostly because of its higher center of gravity. Check
www.informedforlife.org.)
One more thing: The Legacy wagon was redesigned between 2005 and 2006 to improve its side impact performance. I'm not sure what the problem was, but it was enough to convince me that I definitely wanted the 2006. I don't know if that applies to the Outback. Look for a Subaru owners message board and ask, or else ask at the Edmunds Subaru board.
Hope that helps.