I think you guys are kind of missing the point of the line out.
The line out is just a line, literally, from the DAC output to "out". Where as the headphone jack is a line from the DAC, to an amplification circuit with digital volume control.
There really isn't much of a point in listening to a line out with headphones directly connected to it, unless the volume happens to be exactly perfect for you and you never want to change it. Otherwise, the headphone jack will likely sound better anyway due to the fact that it'll have more power and gain coming out of it and into your headphones.
The advantage of a line out is due to the low quality amplification circuits and volume control noise that is introduced by running the signal through those circuits to go to the headphone out. The line out does not go through these circuits. So when you connect the line out directly to an amplifier, the signal is cleaner than it would be coming from the headphone out. This allows much higher quality amplification components to grab the same signal your headphone jack would have gotten, but run it through much better components; thus altering and improving (hopefully) the sound. Not to mention being able to provide more actual power to the headphones.
The best analogy I can come up with is filtering water from your tap for brewing coffee.
The taste of the coffee is the sound, the coffee maker is the source, the filter is the amp, and the tap is the headphone out, and the water is the audio signal. The grounds I suppose are the music.
Your setup is a kitchen sink, with a tap faucet and a seperate filtered faucet (not filtered through the same tap faucet), that both bring out water from a pipe.
If you take water directly from the tap and use it to brew coffee (headphone out) then the coffee can only potentially taste as good as the tap water. However if you take the water via the source and filter it (amp) it, the coffee can taste much better due to not having any pollutants (noise) from the tap water.
This analogy isn't perfect, because you can filter tap water, instead of having to use water from another point of source, but just pretend that once you run it through a tap faucet ONCE, the water is polluted forever. In the case of the amp from a headphone jack, the amp still has to deal with the noise and amplification circuits that are built in, so it's foundation isn't as good as the line out. Dirty water...
But just to illustrate:
Water from Pipe = Signal from DAC
Faucet = Headphone out.
Seperate Tap = Line out
Filter = Amplifer (from seperate tap in pipe)
Coffee maker = Source
Grounds = Music
Taste = Sound
That's about the best I can come up with.