I am a bit of an audiophile but I have a really nice setup with an iRiver H320 and an external amp for my IEMs. This is way better than what you get out of an iPod and it definitely sounds better than the sound coming out of my n800.

However, I am curious about whether or not it is possible to connect a USB soundcard to the 800 through the USB OTG connector. If it is possible, then I would like to purchase iBasso D2(still under development). The combo of n800 + D2(or other USB DAC) has the potential to be the best portable audio setup on the planet.

The iRiver H120 has optical out, but it is an old player and is still HDD based. Being able to use the n800 along with some advanced music applications such as Amarok simply cannot be matched by anything else(Rockbox is awesome, but Amarok is awesomer.

The iBasso D2 is finished but apparently they are having problems getting a case supplier for it

http://ibasso.com/ShowNews.aspx?ID=63

This is not going to come cheap though. Id say about $150 minimum, and even then there is no guarantee that it will actually work with the n800s USB slot.

There are other USB DACs as well, but iBasso has made some nice stuff in the past, and I am looking forward to this one.