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I understand that the iPod does not output anything other than 16/44. So one way around that is to play your hi-res files from your computer into the stereo, via the appropriate (built-in or external) DAC.
I used to use an iPod Classic with a Wadia 171 iTransport to a Bryston BDA1 DAC, and it sounded great with Apple Lossless files. Now I use it a work with a Benchmark DAC1 and headphones.