Audiophiles are a picky bunch and willing to pay out the nose for the privilege of (perceived) improvements in audio quality. Audio Junkies has the story that Red Wine, a purveyor of "battery powered purist hi-fi," is planning to offer their iMod modification for 5th generation iPods (they previously offered an iMod for 4th gen iPods). Basically, they bypass the iPod's built-in (relatively low quality) audio amplifier and send the line-out signal straight from the internal Wolfson Digital to Analog Converter (DAC) to the iPod's Dock connector. Together with a proprietary Dock cable this allows for improved audio quality using an external amplifier.
The iMod will be offered at the end of this month for $249 and you have to supply the iPod. Obviously this isn't intended for all those 128kbps MP3s you got from Napster years ago, but for high quality encoding using something like Apple Lossless.