I've been living with an iPod too, and with a variety of headphones (including Grado 60's). While the iPod is quite listenable, I don't see it as approaching hifi. I see it more like a portable CD player (i.e. walkman type) with a hard drive source. I don't think it was ever intended to be more than that, though I hope for the day when it is (i.e. USB out for streaming music to a decent DAC).
