Just saw your post, which reminded me to give it a listen. I'm currently using a 60gb 5th Gen like the one you're looking to buy. The dac is one I've always felt was a solid dac, so you have nothing to worry about in that respect. As far as amping, I'm hearing nothing that makes me feel the monk is at all being neglected, so if you're going to use the ipod alone, I'd personally have zero issue recommending it as a viable path. Radiohead sounds grand on this particular combo!
Just for clarification, my iPod is using rockbox, so it's not a pure iPod experience, but I'm a fan of that firmware. If your iPod gives you any issues, you can always look into replacing the battery (something I should do probably) and that can be pretty inexpensive, I think around $8 which will include the tools (most likely anyways) to change the battery. When it's open, if you're feeling adventurous, you can also replace the hard drive with either an SSD which for current costs can easily increase the storage space and maybe battery life, or a CF card which will also easily increase the storage capacity. Either path including the battery should most likely run you under $100 total unless you try to go for a huge amount of storage. If you choose to go any of these paths, I'd suggest reading this thread: http://www.head-fi.org/t/566780/official-ipod-video-classic-5g-5-5g-6g-6-5g-7g-ssd-mod-thread