All the iPod solutions but one still rely upon the less than stellar iPod DAC to convert the digits. Even the RedWine line-output option (which I believe renders the headphone jack useless (converts it to line-out), still uses the internal DAC. The one company out there taking the digital signal out of the iPod charges over 2K to do so, which is ridiculous IMO for a device that has a limited MTBF. I'm with T_Bone; get a USB DAC. There are plenty out there that will give your transport/player a run for its money. I like the Paraisea at around $600. Other options exist at the same pricepoint (Lavry, April Music, and others).
Marco
Marco