the external dac will certainly provide better sound, but if you have been downloading from itunes or converting cds at the 128 ACC import setting inorder to fit as much music as you can on your ipod your are getting compressed sound. If you have been importing at WAV or equivalent you'll get closer to the orginal cd sound, takes up a lot more ipod G space so you need one with a fair bit of Gs - difference in space between the2 import settings is like 5-6 times,but music sounds a heel of alot better. Might also consider besides the dac an ipod transport like the Wadia 171