I guess i'm in the minority here, yes I find the clipping/distortion issues have been fixed, however the EQ now sucks arse:
The problem with the new EQ presets is that Apple decided to tackle their iPod EQ distortion/clipping issues by completely changing how they implement an EQ; Instead of BOOSTING and REDUCING frequencies in specific areas, the new EQ presets ONLY REDUCES frequencies.
So for example in the older firmwares (and in iTunes), when you choose the "Treble Booster" preset, the upper-range, high frequency bands would be boosted, however the low and mid-range bands would remain at a netural/flat level. This obviously results in the upper bands being boosted, offering added clarity (or harshness).
However.....In iOS 4.0, when you choose the "Treble Booster" preset, the higher frequency bands ARE NOT boosted whatsoever, but rather the low and mid-range bands ARE reduced, as a way to make it seem as though the high frequency was boosted...but any person with a decent pair of ears will notice that the audio/song does not sound like the treble frequencies were boosted.
The above can be said for the other presets..For example Bass Boost in iOS 4.0, does not boost the lower-end frequencies, but instead drastically reduces the upper-range frequencies.
This is how many 'crappy' software audio players implement EQs.
This method practically eliminates EQ distortion/clipping, however IT DOES NOT boost any frequencies. I'm sorry, but an EQ that can only do -db steppings is a fake, useless POS of an EQ.
Hopefully Apple will go back to the old and "right" way of implementing an EQs in a future update..but knowing them that won't ever happen.
Alright, my rant is over, thanks for listening