South park, Just an FYI... I don't claim enormous miracle improvements with the Zu Cable but I do find it to be much better sonically than any stock or Monster type cable I used prior to finding the Zu Cable Pivot.
Since you do not use the FM transmitter, I presume you may find improvements by using a ripping software like EAC.
The iPod actually belongs to my wife and she's in charge of content. She rips to 192 using iTunes (i think) and I believe she selects AAC encoding (or whatever Apple's format is). At that bitrate, the iPod actually sounds quite good - believe it or not. While it lacks much of the dimension of CD's, it is certainly not as bad as I expected - especially at that bitrate.
I have not tried WAV files on the iPod.
Going back a few years, if memory serves me, I believe WAV was originally a Microsoft-specific format & at the time when WAV first appeared, Apple/SGI/Sun + others used AIFF for uncompressed audio storage - Microsoft used WAV only. As time passed, WAV became more of a standard which could be executed on almost every computer but...part of the problem could potentially be that Apple just doesn't put as much effort into how it decodes WAV files vs. its own proprietary format.
**I have not researched this and it is therefore pure speculation.