The AKM4420 DAC in the Touch should sound better than the decoding in
your iPod...most reviewers are very positive about the Touch DAC.

That said, DAC sound is very subjective and many run an external DAC of
their choice with the Touch (don't believe you have a choice w/iPod).

If it were me, I would get the Touch for the task, just because it has
so many other capabilities to offer, like ability to play HDTracks high
res stuff at 96K.


-- 
eeagle
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