z,
That is a very good question.
The answer for right now is: I don't know.
The Touch has not been officially released at this time. The best guess for being able to purchase one is late December/early January.
I have not seen one or heard one. I cannot say one way or another if a stock or modded Touch will sound better than a modded SB3.
There have been some reports from the beta testers that the sound from the digital output is "better" than that of the stock SB3. No one that I am aware of has compared it to a modded SB3.
Aside from the 24/96 features, the Touch will not be using the noisy display like the SB2/3 Transporter. It will have more memory built it, a faster processor and a completely different DAC chip. You will be able to plug a USB drive directly into it and be able to use it without having a computer on.
There are lots of reasons why one might want a Touch. I just cannot say anything about sound quality at this time.
I will probably have one sent to me when they do become available. I am pretty sure the Denver Audio Mafia will get together and listen and compare the Touch to some modded players.
I will take my time looking it over and decide what may be able to be modded. It will probably be about a month after the release that any mods might be available.