Well..we need to see how the Ipod sounds as a transport. Especially with uncompressed/lossless files on the ipod. In order to be practical, it should sound good with lossless files, as the disk space is limited within an ipod.
People are using Squeezebox, Transporter, sound cards, reclocking devices etc and throwing money at it in various amounts only to get the best possible playback.
Personally, I do not want to invest in $2k for a Transporter because this technology is in a state of flux all the time. I went with the Squeezebox, but HAD to get some mods to get it sound even decent. The Empirical Audio mods are much more 'reusable' in the sense, any new device can be used (with some mods) with the master clock they provide.