Ideal connection from iPod to headphone amp?

[dpgstereo]

I suspect that, like myself, most of us have gotten spoiled or at least our hearing/listening has evolved given the equipment most of us have become accustom to living with. Cool, except there are times when I want to lay in bed late at night and enjoy music. Those of us with significant others know where I'm heading. So I decided to try headphones and an iPod. I have the Shure 550, 5 series anyway, in-ear. They do an ok job. Not really comfortable for extended listening. I wanted more or closer to what I am used to hearing. So I bought Beyerdynamic T5p headphones (p meaning "portable", 32 ohms I think). Really nice cans and sound pretty good straight out of the iPod, but.... So I bought a Beyerdynamic A1 headphone amp. Getting pretty close.

What connection you you guys reccomend from iPod to amp. Inputs on the A1 are RCA analog. I have 70% cd uncompressed content on my iPod, 30% mp3. First, any difference between using 1/8" stereo analog output vs. the flat 32 pin adapter analog out with RCA terminal? I would think no.
Second, thoughts on the iPods internal DA converter vs. an external DA? I have read that you can bypass the internal DA conversion in the iPod, outputing a digital signal. Anyone doing that?
Is the end result of using an external DAC worth the expense? Or will higher rez data be needed to hear a difference?