Ipod newbie question?

Simplest/cheapest way: get a mini to L/R rca interconnect (Radio Shack,less the $5). Put the mini in the iPod headphone jack and rca's in the L/R aux in on your receiver. Tip: have the iPod volume all the way up and use the vc of the receiver to adjust the level.

Little better: Get an Apple docking station ($50). You still need the mini/rca but the Apple dock charges the iPod (and has its own analog out) so you don't have to monitor the battery level.

That would stay within a "tight budget". If you can/want to go more, let us know.

Update: I just purchase and Audio GD Sparrow dac that has a USB input. Can I go directly from the ipod to this dac via USB or should I get a usb to coax converter? Thank you!

you would need a dock that pulls the digital signal off of the iPod before the iPod converts the signal to analog. The Wadia iTransport dock does this. Place you iPod touch into the Wadia dock and go with digital coax from the dock to your DAC. There are several of these Wadia units on A'gon now, search on Wadia and look at the iTransports. You also get a remote that will control the iPod track, FF, seek, etc.
Good thing you have a touch, earlier generations of iPods do not allow the digital signal to be separated before hitting the output stage...only most current generation of iPods/iPhones/iPads do this...

my brother has a system configured like Realremo suggested....it works fine for low cost.

Xantech BT6 wireless bluetooth dock, using the bluetooth feature in your ipod wirelessly sends signal to the dock which is connected to any line input. Allows you to operate the ipod from your easy chair.

There's another dock that extracts the digital output of iPods/iPhones/etc. it's the Pure something or other (can't remember model number). It's about $100 vs the much more expensive Wadia itransport.

Another method is the HRT iStreamer. It's $200 and has its own internal DAC. doesn't have digital outputs though. I'm pretty tempted to try it out for a headphone system I'm putting together to keep things very simple and minimize boxes.

That would be the "Pure Music" dock, Kbarkamian, I think

model number is i-20. pure has them and they are also available on amazon. i like mine a lot. will probably buy another one for my garage system. they offer a money back deal if you are not satisfied too.