Skylab
Reviewerus Prolificus
Thanks Coop. I rarely buy amps to review, but $65 isn't much...
Headphones are very important for sound reproduction, so is a decent MP3 player - and amp however is a very minor thing to worry about. It's always a bad idea buying an amp, and then getting headphones after that. An amp won't make anything sound magically "better" - it might or might not fix minor things in the sound (depending on player or phone), but never gives a "huge" difference. Neither does a line-out function - actually some players sound worse over line-out than they do over their headphone-out (Sony A845, Cowon X5, for example).
Since you seem to be just starting in this hobby, my suggestion is: get a good MP3 player and a good pair of phones/IEMs - and worry about the negligible details later. Spending the additional ~$100 an amp costs for a better, upgraded headphone may give you much more enjoyment than buying a lower quality phone and an amp.
By the way, there's a link in my signature below, under "my gear and reviews", to my opinion about the W1, if you like to read that.