Marco -
I am a regular 6 Moons reader. I simply chose the other article but I am glad you are exposing people to this one as well.
I don't think we disagree about much - but we seem to be coming at this from somewhat different points of view.
What I find exciting is that there is a sea change going on. All the details are not apparent but there is no doubt that things are changing. How do I know - well for the past year I have personally posted perhaps 150 responses to people who are curious about how to use the new digital stuff in their systems. Since all of these posts are on AGon and AudioAsylum (under xmasparty@mac.com) I assume that they are people who are at least somewhat concerned with creating good sound.
Here is the article in which Srajan addresses it - recommended reading for people getting into this area.
http://www.6moons.com/industryfeatures/harddrive/harddrive.html
Once again I find it startling that the reviewer in the article you selected is comparing a $400 unit to a $4,000 CD player. Generally one hopes that 10x buys you something more... I think that what is happening again and again is that these new 'consumer level' pieces are forcing people to re-examine their expectations about what their money will buy.
People who were never going to spend $4,000 on a CD player like the one mentioned in the article are delighted when they discover how much they can get for a few hundred dollars. I think that is the impetus for the original post - how do I hook my iPod into my system.
I think that part of it is audio quality - how much better is good enough, and the other part of it is a whole new metaphor for using their music. Read the posts - people who are doing this are listening to more music and more of their libraries. This may not be the ultimate audiophile concern, but IMHO it is the reason most people buy gear.
What we are seeing is Moore's Law at work - and the blurring of the traditional CE industry imposed lines between good, better, best. It seems increasingly likely that someone who buys a $500 or $1,000 or $1,5000 CD player and puts it up next to an iPod will most likely be disappointed by the performance of the CD player - both in terms of the sound and the value for the money it provides...
The implication for the audio industry is that there are 15,000,000 plus new iPod owners who will not be buying CD players for much longer because this iPod or the next one surpasses anything they ever heard. (same effect as we have seen with digital cameras)
I worked on the original introduction of the CD to the retail music industry back in the 80's. No one will argue that CDs - especially then - were better then vinyl. But the ease, the form factor and the pleasing albeit artificial sound spelled the immediate end of tape and an enormous decline in vinyl sales. In truth, most people though that they were hearing the music for the first time because it cost less then ever to get "good sound". That is what is happening now as well.
From my personal perspective, with my modded Squeezeboxes and USB to DAC systems I am getting better sound then I could otherwise afford - along with a whole list of features that are simply unavailable in traditional gear. I have similar hopes for the modded iPod I am expecting in the mail next week. In short, I am a happy guy, and since I enjoy writing I am trying to make it easy for others to try it themselves.
I totally respect the fact that there are people here like you who have spent years perfecting their systems and educating their ears. And that such people will not find the iPod a satisfying solution. (In fact we agree that its not the home unit of choice.)
But my thesis is that for every person like you, there are many more who are being blown away. There is no putting this genie back in the bottle.