Davimack,
Your question is right on topic with what's been on my mind for months!
I have the next to latest version iPod and on my fourth set of ear buds. Each time I upgraded buds to make the sound enjoyable I got small improvement but overall it's a sonic failure.
From what little research I've done, I think the problem is the onboard DAC and the chip amp that drives the head buds. There are companies like Red Wine Audio that upgrade and even outboard DAC's and headphone amps available. To me this ruins the value of the iPod, it is no longer convenient or compact.
Just to see if my memory was playing tricks, I tossed a standard CD into my sons old "waterproof" Walkman laying in his room (he's grown and in college now). The sound blew away my iPod, confirming what I remembered.
I wish there was a way to mod the iPod INTERNALLY, where it reproduced what we burned on it's tiny hard drive. I think the iPod hard drive is potentially as good as laptop or computer based files playing through our high end systems.
Apple choose to make the circuit as compact and cheap as possible and threw away much of the quality in the process.