Economical alternative to Wadia ipod dock?

I'm helping my 20-something son put together a system. He knows digital; I know analog...kind of. He currently stores the majority of his music on an ipod. What docking mechanism for the ipod would you recommend to feed into a DAC for a best-musical-experience for the buck? From what I can tell the choices out there are the Wadia 170i and ?. Thanks in advance for any ideas you can give me.
Apple TV is the way to go: $225 (too bad the price just went up it was $199) for the 40GB model. It has an optical out, is extremely easy to use and sounds excellent. I avoided the Wadia becuase it clearly was "ergonomically inept" -- the AppleTV is the opposite. And you can stream internet radio at reasonably high sound quality.

Plus there's a lot of video options if that is of any interest.
also make sure your son starts ripping files losslessly. benefits of the outboard dac are ~nil if all of his files are highly conmpressed.
Thanks to all for your ideas and considerations, they are sincerely appreciated though not totally least by me. I will share with him the contents of this thread then make some decisions about where to go next. I did purchase/order a DAC (Cambridge Audio Magic) as part of the system. Any words of advice about getting the most out of this arrangement? Thanks again.

This stuff isn't easy to figure out at first. Then the more you figure out, the more complicated it gets IMO. What don't you understand? I'm sure some of us can help you out.

The DacMagic is very well reviewed. I haven't heard it, so no comment on it. There's a ton of different settings. Like everything else in this hobby, try them and see which works best in your/his space.

As Wrtickle said, make sure his music files are uncompressed. If he's using a lossy format, nothing will make it sound better. Make sure he's copying his music with something along the lines of Apple Lossless, FLAC, etc.

As I mentioned before, I really like the Apple TV. It makes things very easy. I hate the technical and computer aspect of this hobby, and I find the Apple TV to be very good and worth the money. Its far more flexible than the Wadia iTransport and a bit cheaper.