Hi Franke,
I saw this. At $2000, I think it is going to be a tough sell for MSB (but I could be wrong on this one, and the concept if very cool

).
I posted my thoughts about it here on this 3-page thread:
http://www.head-fi.org/forums/showthread.php?t=215641Something you could do (less expensive)?
I have no plans to do something like this, and I'm sure it took MSB a lot of time and effort.
For the cost of the iPod and MSB iLink, you can get a RWA modded Olive music server, Nokia 770 to wirelessly control it, and you'll get a lot more for your money (built-in cd player, cd burner, internet radio, use of an external hard drive for more storage, analog inputs for recording to the hard drive, etc. etc. etc.).

Still, their product is a cool idea and if it was priced a lot lower, I bet it would really sell!
Are there any legal issues (and if not, why hasn't this been done before)?
I'm not sure about legal issues with doing something like this... I'm not sure what they would be.
Why hasn't it been done before? Well, you can't grab SPDIF (the digital output format used by most external dacs) directly from inside of the iPod. You need to take the native data and clock signals before the internal dac and send them to unused pins of the dock connector, and then use external circuitry to take them and processes them to SPDIF.
Unless this product is really mass-produced, it is not going to be cheap.... and we all know that the audiophile market (which this product is meant for) is not the "mass-market."
Best regards,
Vinnie