No, it wasn't ignorant, figuring out the connection options among the universe of devices isn't easy or intuitive. But, if you do want to get a digital signal from the iPod so you can connect directly to the digital input of your player you'll need a device like the Pure i-20 mentioned in an earlier post or one of the other similar devices from Wadia, Cambridge Audio and others.
They don't convert the output of the iPod to a digital signal, they take the digital information that's stored on the iPod and route it to the DAC in your Quad player before it passes through the DAC and amp that are built into the iPod.
One notch back from that in terms of sonic quality is to use a dock or cable that sends a 'line out' analog signal to the input of a preamp or integrated. That signal will have been converted from digital to analog by the iPod's internal DAC but not sent through the amp-on-a-chip that's in the iPod.
Another consideration is the resolution of the files on the iPod. If you have low bit rate mp3 files on the iPod they're never going to sound like CD or higher resolution files no matter how you extract them from the iPod.
As an aside, I love the iPod, iPad, iPhone, iTouch devices, I think I own six or seven of them, but expecting a device that's designed completely around portability and convenience to sound as good as high resolution files on a music server or even a CD player seems unrealistic to me. And the pursuit of that is a waste of money, from my experience.
