If you refer to specialized LOD as to those recommended for an iMod your right. But, there are options for "regular" iPods. I went for one of the options offered by
Senstation. Audio quality is a notch or two above HO ( using an external amp, of course). My setup is pretty simple and on the cheap side: an iPod 5.5 G (240 Gbs), a Sendstation Pocketdock AV, Total Airhead and Shure 530 (I know, I'll create a signature soon. I am a noob here). I have the iPod for 3 years. So the investment has been around $1000 spread over 3 years. For my not so golden (or even silver) ears it is good enough.