It was discussed many times - line-out is bad when used as headphone out, headphone out is OK to great when used as the line-out. I had the iRiver H340 for a couple of days, and neither its line=out, nor its headphone out were as good as the iRiver E10's headphone out used with max volume and EQ Normal as the line-out for the headphone amplifier. Gloryfying the PCDP's is a mistake nowadays - their internal hardware is pretty the same as the mp3 players' excluding the CD transport which is total crap in portable devices in most cases, so compared to decent mp3 player reading lossless and HQ lossy formats, the PCDP's are simply inferior due to poor quality digital data readout. Of course, anti-shock buffered models don't suffer from the data jitter but it's still at best the same level as the top mp3 players.
The idea of using headhone out or line-out is to use the external (more powerful, better) amplifier but when you connect it to the headphone out you unload it due to high load impedance compared to headphones which results in low distortion, and again, more powerful external amp is more immune to loading, and doesn't distort either. So you get overall better sound, and it doesn't matter if it's headphone out or line-out from a DAP. The matter is to choose a good sounding DAP to feed the music to the amplifier.
Setting volume to the maximum makes full use of the internal DAC resolution and maximizes the S/N ratio at the amplifier input.