ive read on the ipodlounge that they miniplug/optical cable doesnt work with the ipod. though I bet apple includes that feature in the 5th gen ipod and possibly the 2nd gen ipod mini (im buying one as soon as the feature is added) they have included this minijack and digital connector on there new imac so i bet youll be seeing it on everything apple in the future.
sound quality when using the optical is very good but the only grip that I have is itunes doesnt do gapless play so there is a 1-2 second gap between each song also if you listen with headpones you can hear a small pop in between each song. both are probably easily fixed in the next version of itunes though and from what ive read on the itunes forum on apples website it seems to be a pretty popular requested feature for true gapless play.
sound quality when using the optical is very good but the only grip that I have is itunes doesnt do gapless play so there is a 1-2 second gap between each song also if you listen with headpones you can hear a small pop in between each song. both are probably easily fixed in the next version of itunes though and from what ive read on the itunes forum on apples website it seems to be a pretty popular requested feature for true gapless play.