Turns out that cables are really important because the key to optimizing an iPod as a source is to use the line out on the bottom of the case - not the headphone jack. Amazing to me that our entire high end industry went for the easy money headphone jack solution and proceeded to charge a fortune for it.
Here's what they didn't tell you.
The line-out is a constant output. It is not controlled by the wheel on the iPod. So you are getting signal after the DAC before it goes through the pre and the amp.
The Pocket Dock is an example of a widely sold unit which allows the iPod to keep charging while providing the audio out from the dock. SIK also makes a couple of nice variants.
Naturally there are some folks who have figured out how to build really exquisite cables for this very weird pin - which technically is a "USB 2.0 0.5 mm pitch stroke type connector DD1 series".
This work is driven by the HeadFI crowd who utilize the iPod because it fits so well with their headphone amp battery powered packages. These are terminated in a mini, but they can also be terminated as an RCA pair.
These are a bit cleaner because the builders only cablethe audio out pins and do not cable the power pins - i.e at some point you will have to stop using the iPod as a source and recharge it. Given that the big units will go 8-12 hours this may or may not be an issue.
The ever inventive Drew at Moon Audio has done some nice work - you'll need to scroll way down his Headphone & Portable Cable section to see his Silver Dragon offering.
Another company I have worked with is http://www.aloaudio.com/ You want to talk cryo Jena wire, silver in Teflon, litz, cotton, silk etc just bring your pen. The work is stunning and sounds great. Slowly being overwhelmed by success but they have been willing to build whatever you need in the past. One big difference is that in HeadFi land cables tend to be a few inches while we need longer stuff.
If you really want to do everything you can, you get Vinnie to do an iMod - though now you are back using the headphone jack out but its all been rebuilt.
My guess is that if you do Apple Lossless and come out the dock with a premium cable it will be very enjoyable, though probably not as resolving as what you are used to. On the other hand, after you fire up a Playlist or put it on Party Shuffle its game over for anything but the most critical listening.
If you really want the great solution that will send your Cary running for the hills, take a look at the work Gordon Rankin is doing over at Wavelength audio.