The comments thread to that article was interesting, it appears audiophiles are alive and well.
Haven't tried the Red Wine mod. There are a few of these being offered - with the large harddisks on today's iPods it's a good option. There are even those who'll replace the Wolfson DAC in the iPod.
Here's a variation, no compromises, from Krell:
http://www.krellonline.com/krell_component.php?id=108&page=KID