Curious about the somewhat contradicting reports in this thread, I went to my local Tesco with my Cowon D2 and UM3X in my bag. Contestants: the new Ipod Touch, the new Ipod Classic, my D2 and my 2008 120Gb Classic left at home (but I've been using it a lot for almost a year so I'm well familiar with its SQ).
Cowon D2 - dead flat, cold, analytical but very revealing (mind you, all effects and EQs turned off). The new Touch - probably a bit better. A little more weight, maybe an improved imaging and I think, I'm not very sure but I think - better textures. All in all probably a bit better but nothing major and the overall sound is, similar to my Cowon, on the analytical side of things. Ipod Classic - wow! Big time wow! The first thing you notice moving from the Touch to the new Classic is a much improved soundstage. Where the Touch sounds flat, the classic adds a lot of space between instruments and voices. I couldn't really believe it so I went back and forth several times. The same tunes played over and over on both - only to come to the conclusion that I'm not mad and the seemingly broader, wider soundstage on the Classic is definitely there. Moreover, the overall SQ is, to my ears, significantly better on the Classic compared to the Touch. A lot more detail, better textures, an overall smoother, more enjoyable presentation, a weight that leaves no chance to the Touch or my old Cowon. Still in disbelief, I've checked the EQ settings on all three players. All flat, no processing of any sort. Back to the Classic - yep, it's that good, indeed! Now, after the initial surprise, some critical listening. First of all, neither the Classic, nor the Touch display any hiss at all with my Westones. Secondly, while the Touch sounds flat because probably has a flat response, I think the new classic is equalised. And I mean heavily equalised from the factory. A frequency graph would indeed be very helpful. I think there's a significant boost in the low/high frequencies, but also some sort of widening/spacing effect applied to the sound. The good thing is - if you're after this kind of sound, it really does the trick. It's loud, it covers most bases, there is no discernible hiss or distortion. But if you are more into the hifi territory, the Touch is probably closer to the musical truth.
Now regarding the old dispute between the 5.5G lovers and the Classic supporters, I've had both. I find the old 5.5G, sonic-wise, to today's standards, almost unbearable. A warm but bloated sound, heavy distorsion, annoying hiss levels. The great thing about it, however, is Rockbox and that alone is a big issue for me. I've never been an iTunes fan, although I've had quite a few Ipods, Macbooks and so on. No matter what arguments Apple fans will ever invoke, a simple, drag and drop interface with an extended format support like Cowon's is so much better! And having both a Macbook Pro and a Windows Vaio Z series, the inability to syncronize my playlist with both laptops is so annoying (I'm sure some of you know that, with Itunes and Ipods, it's either, or - Mac or Windows, not both at the same time; once you format your Ipod for Mac, you can no longer use it with Windows unless you re-format it and vice-versa).
Which is why I'm so fed up and reluctant at buying another Ipod, although the new Classic is simply better than my 2008 model and has much to offer for roughly the same price - larger capacity, better SQ and so on.
Oh, and regarding the Wadia Itransport and comparisons with high end players - spare me. I've just sold mine, together with the VDC 9.0 CI Audio power supply. I have a Naim CDX2 and a Lavry DA10. Wadia & Ipod & Lavry playing ALAC files (ripped using a Plextor Premium at 1X speed) vs the original CDs on my Naim - no competition here. Not even close!