well,
I've done a lot of ''research'' in this regard and I think a dedicated DAP sounds better than a Mobile Phone. Though some mobile Phones come close.
For example the samsung INNOV8. I never heard it but it's supposed to have stellar audio performance. otoh the nokia N96 is said to be one of the best sounding Mobile Phones ever.
Sony-ericsson Walkman phones faal short in all regards, but the latest W980i (I think) is rumored to have good audio performance. I doubt though if it will ever be able to compete with the ''big boys''.
and last but not least the Motorola ROKR E8 should have a stellar audio performance too.
So I think only the Nokia N96, Samsung INNOV8 and the Motorola ROKR E8 come close to a real DAP in terms of SQ. I think they would surpass cheapo DAP's with ease but couldn't reach the SQ of a Sony, Apple, Cowon, Iriver, Kenwood or JVC DAP.
I left two phones out of this comaprison, namely the iPhone and the B&O Serenata. The Serenata is just waaaaaaay to expensive, it just isn't a mobile phone anymore!!! and the iPhone was designed with one of the worlds best DAPs in mind to start with.
Rgds