Short answer is yes. If you were to purchase a L9 line out dongle (LOD) with your E17, you can plug it into the 30 pin connector on the bottom of the iPod and the other end to AUX in on the E17. Your headphones would plug into the headphone jack on the E17 - the iPod headphone jack isn't even used. This setup is the most common way E17 users attach to iPods/iPhones. A very small percentage will use the included L8 dongle to connect the headphone jack from the iPod to the AUX in on the E17, but this results in double-amping. and poorer sound quality. A really small number of users will spend big money to buy something like the Fostex HP-P1 so they can use the iPod/iPhone digital output and bypass both the internal amp and DAC.
Edited by AgentXXL - 1/6/13 at 1:14pm