Just for reference I currently own both a 120gb Ipod classic and a 30gb Ipod 5g. Here are my (cliffnote) remarks on sq of each:
Ipod Classic 120gb:
Overall, I feel the strength of the classic is in how emphasized the treble is. This ipod has a much colder sound than the ipod 5g, but can produce a similar level of detail.
Ipod 5g:
The 5g is significantly warmer sounding than the classic (at least through the HP out) and I find detail retrieval to be the same if not better than the classic. Bass emphasis is higher, but, to my ear, it seem the classic has a tighter bass note through the HP out.
So Which One Is Better?
I believe this depends on a few factors. First and foremost, if you plan on doing a DIYmod, the 5g/5.5g will always be a cut above any other ipod unit. I will make a full post once my LOD comes in as a comparison between LO and HP on the two ipods, but for now, if you are only using the HP-out, I feel that which unit you prefer heavily depends on what kind of sound signature your IEM/HP may have. With my UM3X, I can honestly say that music sounds livelier via the classic (HP Out Only), but this is because the westones are very warm and sound intimate already. The 5g tends to emphasize their sound signature (which for some is maybe a good thing).
I have used Rockbox and the eq does work well, however, I am not sure if its my battery (I bought the unit second hand for 35 dollars, replaced the front plate, backplate, and click wheel, and then did the DIYmod), but, with flac files, I get maybe 1 hour of playback!! (If someone could tell me if this is abnormally low please let me know as the battery could need to be replaced). Even with ALAC + itunes the battery life is not much better.
I am waiting on my custom iMod LOD from twisted cables, so I will let you know how much of a difference the DIYmod makes. I would have given your a LO impression now (even though you aren't really interested in that per-say) but my ALO LOD mysteriously stopped working (???).
Goodluck with your purchase and I hope this helped! I will make a much more detailed comparison once I have my rig finalized and can sit down to make notes (university + work has me busy as hell)