I just got the latest itouch and after some critical listening and comparison with Dacport (1 ohm modd) with SM64 IEM. My ears tell me that this Itouch has a pretty darn good headphone out. The more I listen, the more I think I am connecting to the Dacport but in actual fact, I am connecting to the headphone out. I still can't believe sound quality is that good from the headphone out... so much has change with dedicated mp3 player.
To confirm my own personal test, I went to do some research as I believe something must have written out there if its that good.. and indeed I found this thread and Ken's review on the critical test.
I am sure the portable amp/Dac seller would not like you to know and may have a lot to counter.. but my own hearing conclude the Itouch is about on par with the Dacport (95% there). I would not even consider getting a dedicated portable amp/Dac as it sound really good already.
Anyway enjoy the read below..
http://www.kenrockwell.com/apple/ipod-touch-5g/audio-quality.htm