From the specs I saw the digital output was the right next to the power plug. From the picture it looks like just power, analog audio output and component video is hooked up. Are you sure you were hearing digital out of that ipod??
Though I was in the room for just a few minutes, I can vouch for Wes's overall response. John explained how this is the only product to bypass the player's D/A. Very cool. Looking forward to trying it in my system.
If you look carefully, you will see that next to the power cord is the S/PDIF coaxial interface, then the analogue audio, then the S-Video output and finally, the component video outputs. So yes, it DOES have a digital output from your iPod (using Apple's proprietary authentication process - using an Apple supplied chipset).