Ipod + Wadia 170i Dock OR AppleTV + Airport Expres

Well you will be stuck with only what can fit in your ipod with the Wadia setup and you can have access to your whole collection from the Apple TV. From a convenience standpoint the Apple TV is a lot better. I personally could not live with only having available what will fit in an ipod. I also have the Wadia doc and I'd say it sounds a little bit better than the Apple TV, but it's hard to compare since I have different cables and such. If you have an older ipod forget it, it's a major pain. You can't see what's on the screen of the ipod while it's playing and you have to dock and undock every time you start it up and shut it down, plus no remote control. If you do go the Wadia route the only way it's any fun at all to use is with the newer ipod classic. You can stop and start the ipod (quick) with it docked and see what's playing while it's playing. I've only used the Wadia with an older 80GB ipod and the newer classic as well as with the iphone so maybe it's pretty smooth with the touch and nanos, but those have small capacity so it seems like they probably wouldn't be what you are thinking of anyway as far as ipods would go.

I agree with Ejlif. I love iPods, I think I have six of them if I count my iPhone, but I've never understood why anyone would build a high-quality home system around one. Everything about them is designed for portability and they do that better than anything else but the imperatives of that design goal mean compromises in storage capacity and accessibility that there's no reason to deal with in your main system.

Having a simple dock with line-out capability plugged into your main system does make a lot of sense for those tunes you have only on your iPod but beyond that some kind of music server like an Apple TV, Mac Mini or PC connected to a good-quality DAC and on to your other gear makes a lot more sense to me.

Do folks who use the AppleTV route have one big enough to store most of the music on or do they stream to the AppleTV from another Mac?

Is there an advantage going via an AppleTV over going directly from the Airport Express into the DAC?