iPod to DAC Connection


I was disappointed that the fourth generation iPod announced this week did not have a digital output so that it could be hooked up to an DAC. I think it could provide near audiophile caliber output if you used the best AIFF or Apple Loseless processing options and a digital output. Now, I'm wondering if it is possible to have a digital output for it by somehow hooking up a cable to the iPod itself or the dock that would be Firewire or USB 2.0 at the iPod/dock end and S/PDIF at the other end to plug into a DAC. Anyone know if this is possible? Does such a cable exist, or maybe the digital bits coming out of a Firewire output are different from those going through a coaxial data cable? Any insights would be appreciated.
bruce_1
I have the AirportExpress, use for hours every day to play playlists (everything from classical/opera to 60's soul music) and love it, but it doesn't help when you want to get maximum fidelity in a portable pkg (i don't have a laptop). I don't think it is asking for too much to want a digital output on the iPod. They cound put it on the dock. The Airport Express has a digital output, so it isn't like they don't recognize the value of providing it!
I use a modified Transit with coax cable attached. It passes everything, including iTunes, bit-perfect .wav files and even MP3. I drive a modified P-3A upsampling DAC with it. The quality of output is as follows:

MP3 - acceptable, but depth and dynamics are compromised
.wav @ 44.1 - as good as the best transport
iTunes - more dynamic than .wav files, but vocals are a bit hollow
.wav @96 - best of all. a bit more dynamic than iTunes and more natural on vocals. Leavs all transports in the dust.
Please explain how this is done. I'm interested in such a set-up.

How do you bypass iTunes on a Mac? This approach may take the transport out of the loop, but it also seems to make the ease of using a computer for organization gone too. Please explain. Thanks.

Michael