Regarding my new iPod Touch 5g and its audio quality... as embarrassing as this is, I was doing comparisons for the last day (too much comparison for my own good) and realized something stupid. I had recently switched to 256 AAC before my classic died, just to test the quality and save space to fit all my music on the classic. Plus, 320 requires me to maintain a copy of every lossless song, because 256 is the highest on-the-fly conversion quality itunes allows. Anyhow, I could detect the difference, but after agonizing over space vs. quality, I determined it was best to have all my music on me (i listen to a lot of different music all the time and never know what i'll want to hear next). Needless to say, I hadn't done very much actual real music listening (for enjoyment, not comparison) with the 256 yet, but it seemed sufficient enough.
I guess I was wrong. After comparing the devices, I remembered something unfortunate. I had put 320aac files on my wife and father's ipods, so the comparison I was doing wasn't fair. So, I copied 320 files to the new ipod touch and lo and behold, the quality was either identical or so close as to be undetectable easily. Therefore, the ipod audio quality is in fact very good, so I'm guessing it's the same DAC as the classic? 256aac however is not very good.
I was so sure there was something wrong with the ipod quality that I was about to return it (literally the following day), when I realized my mistake and compared 320 files. My wife and I both couldn't tell the difference between devices. My wife even surprised me when she (not an audiophile) could tell the difference between 320 and 256 aac on every test blind. I tried to fool her, but she could tell everytime and even explained how it sounded different without me ever telling her or her having any background in audio terms.
Needless to say, I'm sad to sacrifice space, but 320 is going back on my iPod. If only we have ipod touch's big enough for lossless or at least larger 320 libraries... ugh... I have tested 320 vs. lossless, and with my friend doing a double blind test I can tell the difference 80% of the time. The irony is that sometime I don't even know 'why' I can tell the difference, but I know 'something' just doesn't sound right, and I can tell which is better. Like it's missing some small amount of space or depth. However, lossless just won't cut it on an ipod touch unfortunately. Not enough gig-age there. ;-P