From the many posts I've read from head-fi, certain gear --say Koss KSC75 and a CMOY-- will give you MUCH improved performance over a stock earbud with an iPod. However, there are diminishing returns (again, according to the forum since I don't have any high-end gear) once you pass a certain point in gear/music quality/your ears.
I believe the diyMod exhibits this (My caps are not burned in yet!) property. It is definitely better than my original line-out with an amp, but it isn't night and day difference.
It was worth it for me since 1) I like DIY stuff, 2) My nano did not break, 3) I had an amp/LOD/connectors/soldering iron/etc beforehand so there wasn't a huge cost.
edit: KoKoKrunch, I actually changed the cable in my dock to a male usb cable. Because the cable I initially used was very, very low quality, the iPod would only get connected with USB1.1 and wasn't charging! The original cable had 28 gauge wires with shielding I could literally take off with my nails. Very bad quality! I chopped up an extra digital camera transfer cable to find 2 layers of stranded shielding and MUCH higher quality wires. Once I hooked this cable up everything just worked as it should. Moral of the story: use high-quality USB 2.0-rated cables or just chop up your OEM apple cable.
Originally Posted by KoKoKrunch
The iMod is not worth it, the DIYmod is like winning lottery. Haha, actually to tell the truth iMod vs iPod isn't a huge huge huge difference in the first place. I spent like US$6 modding... So? Is it worth it? Up to you to decide.