Another option is a nice headphone amp and nice headphones. As with everything, the sky is the limit with price, though.
I'm using a tube based headphone amp and Grado SR60 headphones and this rivals my much, much, much more expensive two channel system. I've used it with both the iPod and Squeezebox. The SB is better, as the music is uncompressed, and my music on the iPod is very compressed. But the amp really improved the music on the iPod, too.