In the old days, at least, a headphone jack was intended for a low-impedance load (such as headphones). A line-out connection, which I *assume* is the same as the iPod bus connection, was intended for a high-impedance load, such as the line-in jacks on an external amp. Using a headphone jack to drive an external amp could be done but was nothing a "purist" would even consider.

That said, I have never done an A-B comparison using my iPod. Maybe somebody here has.

 

I've done a direct A/B ccomparison with an iPod classsic. The output from the line out dock was indistinguishable from the original CD. There was a very slight difference between the headphone out and line out, but not enough to worry about. The DACs in Apple products are high quality. There really isn't any reason for external DACs. But some gear heads seem to like it, so Apple is giving it to them.