I've used my 60gig iPod photo as a source with WAV files and a Signal Cable Silver Resolution cord going from the line-out. It's OK for background music, but does not have the PRAT of either my my Muse DAC or Modwright Sony. I much prefer the convenience of the larger interface of a laptop and iTunes, and the sound via my U24 and DAC is outstanding to my ears, and can best the iPod alone, and is very difficult to distinguish from an original disc. The problem with the iPod is that, even using the line-out you are limited to the less than desirable internal DAC. There is one company that is making a device that bypasses the DAC and gets a digital output to feed to a DAC, but, last time I checked, it was at a ridiculously high expense. Monitor Audio made claims to this effect, but when asked, the company denied the iDock's ability to utilize digital output. Line-out is definitely the way to go to avoid the added grunge of the iPod op-amp. In my version a simple Apple iDock gives you a mini-headphone plug line output at the bottom. Earlier iPods had this standard. Can't speak to the iVideo.
Marco