He's just saying that right now, he has to pay $600 for an audiophile player with good UI--and he's hoping that the X3 will change this. This is based upon my extremely detailed full analysis of his post above, with my findings published here.
About the iPod DAC-I have the Classic 7G and I find the soundstage to be a bit narrow and the treble to be a bit harsh. But hey, that's just me. I love the UI and storage space of the Classic (160G can hold all of my music) but the DAC does not quite cut it. Sure, now I have a fairly measly portable setup (Went from a E11 w/ RE262s, which were stolen, to a pair of "temporary" GR06s), but I can hear an audible difference between the iPod DAC and my ODAC, rPAC, and receiver integrated DAC (Pioneer Elite VSX-52 DAC being worse than the iPod's) But hey, this is just based on subjective listening and the opinions of many of my friends.