Agree with all the posts. hiss, decent, not great sound. I bought it for the optical output, since I already had a microDAC hooked up to a portable dvd player.
You can use any normal toslink cable and a pair of mini-to-toslink adapters. For portable use, you'll probably want at least one of the adapters or cable ends to be a right angle. Again, for portable use, be wise, and get an extra set of those adapters. They're often cheap plastic and break pretty easily.
I have rockbox from a few months back. I don't care too much about the extra features, and using the optical out, some are quite useless to me. I mainly like the smaller font that shows more music titles on the screen. The worst thing about it is that sometimes the remote gets out of sync with the system and you have to either restart the unit or just pull the plug on the remote. This mostly happens when it goes into the setup stuff, which sometimes happens inadvertantly, partly because the iriver is pretty hard to navigate with that silly 5 way switch, and the remote isn't the easiest either.