Scientific American explains - it's all about your inner ear and eyes disagreeing:

Consider the situation when one is reading in the back seat of a car. Your eyes, fixed on the book with the peripheral vision seeing the interior of the car, say that you are still. But as the car goes over bumps, turns, or changes its velocity, your ears disagree. This is why motion sickness is common in this situation. If you have this sort of reaction it is usually helpful to stop reading and look out the window.

Of course, understanding that won't make my daughter feel any better when she tries to read in the car :)