a <$1000 headphone and an amp/interconnect would be a better investment with an ipod. i wouldn't suggest open headphones like the grados if you're going to be taking the ipod out in public (i need to pump up the volume on my SR60s to hear well, they also make me look really really stupid)
but if you're going to be using them at home, then by all means go for the rs-1. i haven't personally heard it, but i love my grado SR60s and i've heard great stuff about the rs1. if it's for just home use, maybe a RA-1 amp from grado would be a good investment.
just because you have the money doesn't mean you have to spend it; you could drop a little over $300 on the Sennheiser HD650 with an amp/cryogenically treated cable and still have tons of cash left over for a source upgrade to a RedwineAudio iMod, which with rockbox will play all of your flac files so you dont have to change the files.
i might be wrong though, i don't know the cost of a nice amp for the hd650, and the imod would cost $400 if you bought a 4g 60gb ipod photo.
hell, some beyerdynamic cans would even suffice, their top models are all under $250 and sounds great, with most problems fixed with a recable (haven't heard a recabled one yet but given the praise they get here i'll assume it's worth it)
a $1000 headphone is NOT worth it with an unamped ipod.
i don't consider myself an expert by any means, so i may have a few inconsistencies in my post. other people will be able to elaborate a lot more. i could provide you with any links to the stuff in my post though!
np: Queen - Somebody to Love