Once again, the newbie has a question. Recently, I've been thinking about getting a DAC to pair with my iPod, but I've read all over on Head-Fi that external DACs (e.g. FiiO E07K/E17) will only work as an amp when paired. Is this just a misconception, or do DACs only work with a *specific* range of iPods? Thanks for the help in advance.
No, as long as it is MFi by Apple it will work for all of them. For example, my VentureCraft Sound Droid Typhoon only listed to support recent iPod/iPhones, but my 1st gen iPod Touch running iOS 3.1.2 still works fine with it. There maybe minor issues like charging and what not here and there if it is not officially supported, but I have not heard a MFi DAC that will not work with an iPod/iPhone at all when it is not supported.
Here is a list of MFi DAC/AMP for your consideration above FiiO's:
Apogee ONE ($250, more for Mac and recording, but also serves as a DAC/AMP for iOS)
Sony PHA-1 ($350), PHA-2 (pending)
VentureCraft Go-DAP DD Socket 1 (DAC only, $328-426, ~$150 w/minor case defects)
VentureCraft Sound Droid Typhoon ($523)
V-MODA VERZA ($600)
Fostex HP-P1 ($650)
ADL X1 ($650)
CypherLabs AlgoRhythm Solo -R or -dB (DAC only, $500/$700)
CEntrance HiFi-M8 and varient ($700)
VentureCraft Go-DAP TT ($823)
CypherLabs Theorem 720 ($900)