When I ordered my 5gen iPod, I also ordered the Universal Dock.
As far as I understand, "true" line out volume does not vary even if the volume on the iPod was adjusted.
But when I tried the line out of the Universal Dock, I was surprised that when I adjusted the volume on the iPod, the volume out of the line out also changed.
So, like many persons have experienced with their own Universal Docks, they felt the line out of the Universal Dock is not "true" line out.
But one time, I was able to make the line out on the Universal Dock function like a "true" line out. The volume out to my Altec Lansing CS21 speakers didn't vary no matter how I adjusted the volume on the iPod.
But other times, the Universal Dock line out was not functioning as a "true" line out.
I couldn't understand why, but I thought there must be some preconditions for the Universal Dock line out to function as a "true" line out.
And there is...
When I attach my CS21 speakers to the line out of the Universal Dock, and the speakers are already on, and then I attach my iPod and power it on, the line out functions as a "true" line out.
However, when my CS21 speakers are not yet powered on, and I attach my iPod to the Universal Dock, power it on, then power on the speakers, the line out of the Universal Dock doesn't function as a "true" line out
So, it seems there is some logic happening with the circuitry inside the Universal Dock. The Universal Dock can "detect" if the "load" ur attaching is "powered" or not, and the line out acts depending on it.
But, my mileage still varies. Sometimes, I still cannot get the line out to function as a "true" line out even if I power on the speakers first before I attach the iPod to the Universal Dock then turn the iPod on.
All in all, somewhat, I have an understanding of when the Universal Dock line out functions "true" or not.
I just hope it is more consistent...
Hope this info helps...