Portable Source Component Upgrade Help...

I have an iphone 3gs right now. All I can say is that I dont know why I even bothered to get good earphones (W3's and Ortofons) for this thing. I'm relatively new to this community. This thing is a piece of ****. Since I got these new earphones I'm really noticing it. I much rather prefer to use my $400 computer for these earphones. The difference is far from small. Its like comparing a pinto to a porche. For $400 I didnt expect this to be the case. I need help deciding what to do. I have a budget of about $800 and this includes all shipping fees. Right now i'm considering going for a hifiman-801 which would mean I'd have to use the built in amp which as I understand isnt that great for iems. My other options are a portable amp with a lod cable or maybe an iriver 120 or some other good source with an additional portable amp. Here are my considerations....

1. SQ
2. Neutrality
3. To be able to use with Cans in the future (possibly higher impedence Cans)
4. Upgradeability

What I mean by "upgradeability" is that this isnt going to be an end all for me. In the future I intend to add to my collection of equipment. For example getting those higher impedence cans or one day setting up a nice desktop rig. This in mind, I understand that the hifiman is a bit of a steal, if nothing else for its dac. The dac i've heard compared to much more expensive desktop dacs rather favorably and that makes me think maybe I could use it one day for my desktop rig. At the same time, I dont want to be stuck with something i'm going to have to wait to enjoy. I just need some help deciding what to do. Given how terrible the headphone out is on the ipod I wonder if the lod is really going to make the substantial difference I am looking for. I heard about an Iwadia desktop rig that bypasses the dac of the ipod/iphone and that really seams to interest me as it would be convenient to just sit it down in this thing with a nice dac supplamenting it. To some extent this could be a solution for my desktop considerations if the lod from the ipod isnt so bad that I cant use it portably with a good amp. Its also convenient since I wont have to lug around an additional hifiman with my iphone. I can just strap the amp up with my iphone and be done with it. Again though... its all about the sq... Anyone have some advice?

My iPhone makes my music sound "muddy". I don't know if I'm using this word properly in accordance with how it's often used on head-fi. It's veiled. Also the instruments do not seam realistic. Particularly the piano. Eq helps but not as much as I would like and often detracts from other parts of the presentation. I'd like to say that sound seperation is inferior.... In any case. It's muffled overall and this is not the case with my computer. It's far less noticeable when I play movies or games but with aiff and alac files it's very obvious. This is what I'm noticing and frankly I don't understand how it's not entirely obvious to everyone what a terrible source it is even if my description of what is happening isn't good (I'm somewhat new here so...). I respect your opinion but I have to disagree with you. :-(

I would like to add though that with the w3's it is alot less noticeable.... I will also say however that the w3's, though great and very detailed, are not nearly as detailed as my e-q7's which is where I am experiencing the problem the most. I'll listen to my w3's and like them better on my iPod then switch to my CPU for a while and listen to them on my CPU before I switch to the e-q7's and it always surprises me what I'm hearing. The w3's are my current fav earphone primarilly because they sound so forgiving on my iPod. Now this is not to say they aren't great earphones or not detailed. To the contrary they are. I'm sure there are other contributing factor as to why they are so forgiving. Music is the final factor also. I have aiff miles Davis directions as well as my funny valentine and alac "the enchantment" by Bella fleck and chic correa as my reference albums. The later is where the effect is most obvious. On my techno/house/dance albums by "Infected Mushroom" it's not nearly as obvious.

Frankly it also severely obfuscates details. Simply.... Listening to Yes on ny iPhone I'll think that a vocalist sounds great because I dont hear very much of his technique, almost like it's picking out only a very muffled section of his voice, and then on ny computer I'll all of a sudden be much more critical of his performance because I hear more of how the air is actually comming out of his lungs and mouth instead of just a note. I feel like on ny iPhone I sometimes just hear the note. It may as well be a computer sythesized A comming straight into my headphones because there's nothing making me feel like air had any play in it.

That's the setup I was thinking about. Will te arrow enhance the sq really and what line out cable were you gonna get? Just wondering...