Where to start in building a beginner's system?

Wadia 170i is the natural starting point if iPod is to be your source. The next link in the chain needs to be a DAC and there is a very big range of options in this regard. If you prefer a non-oversampling (NOS) DAC, you could look at options like Mhdt (Paradisea or Havana) or Audio Note (2nd hand DAC 1 or 2). For upsampling models, there are even more options - I second the recommendation for the DACMagic from Cambridge as a great budget option. Also check the Benchmark and Bryston DACs.

Finally a decent integrated amp such as from Musical Fidelity (A300, A5, etc), Cambridge Audio or NAD for example. If you would like to include tubes in the amp, have a look at Prima Luna, Rogue or Cayin for good value.

An alternative option would be to pick up the Musical Fidelity A5.5 integrated amplifier which has an internal USB DAC and run your computer music software stright to the USB DAC.

You might want to have a look at Peachtree Audio's amp and DAC combinations. They're designed assuming that you'll be using a digital source like an iPod or music server, or both. I haven't heard the new Nova but I own the Decco and am really happy with the versatility, simplicity and the sound. Both the Decco and Nova have a tube preamp section, internal DAC's and multiple digital and analog inputs.

Add the Apogee Mini-DAC to the Benchmark and Bryston mentioned by Hens.

@django81 

So where are you at now? It's been a couple of years, I looked to see if you put up a system page. What's happened in your audio life?
 

IPod as front end is fine.  Posters are correct to suggest bypassing the built-in DAC as it is marginal.  

The Naim DAC-V1 is great and found used for between $1200-$1600.  I own one and it can be used as a preamp with volume.  

Paired with Elac Navis powered speakers $2700 new would be sweet.  Balance of the monies for stands and cabling.