There's not really a lot of audible difference between high bitrate (notice: HIGH) lossy encodes and lossless encodes; it's minimal. It also depends on the material being encoded (some data lends itself to being smashed better). iPod actually does play ALAC, if it's a newer model - again, you can't just say "iPod" and assume we can talk about the device; "iPod" can mean everything from the original 1G of the late 1990s to the modern renditions with touch screens. There's a hell of a lot of variation there. My guess is you're getting "full lossless" out of the iPod, but there's either an impedance mismatch or a gain structure squibble that gives you an audible difference between LOD+amp vs internal; and that's where you're getting "better" or "worse" from (in other words, there's no magic involved).
Ultimately, I wouldn't worry too much about "bit perfect" and other buzzwords; my contention on "are you playing garbage" is more along the lines of people ripping CDs into 96k or 128k because they can get "a whole lot more and it's all the same thing" and then complaining about the fidelity. That said, some material will actually survive 96k or 128k just fine - it's fairly rare though. 4:1 or similar is almost certainly transparent though (at least with WMA or mp3; there are smarter encoders out there, like Dolby AC-3, but they deviate more from the original material (it's all based on understood psychoacoustics and data theory)).
In other words, there's only so much you can do to ensure things are working correctly, and doing a whole lot more (at huge cost, of course) doesn't get you anything but a lot of new toys to show off.
