Economical alternative to Wadia ipod dock?

I'm helping my 20-something son put together a system. He knows digital; I know analog...kind of. He currently stores the majority of his music on an ipod. What docking mechanism for the ipod would you recommend to feed into a DAC for a best-musical-experience for the buck? From what I can tell the choices out there are the Wadia 170i and ?. Thanks in advance for any ideas you can give me.
I think you pretty much summed it up the Wadia and ?. I don't know of any other product that can pull digital out of the ipod short of a few companies that have to mod the actual ipod to get it to work and costs way more. The Wadia is a great product and sounds great too. It doesn't work so well with older ipods or even the iphone. I think that is the main reason you see so many for sale. It is a little misleading that they support older ipods. I have a 5th (I think) generation ipod 80GB that they only way it works is you have to start it playing and then dock it and it will continue playing with the screen basically blank (you can't see what is playing) The iphone sort of works but mine constantly keeps beeping and asking if I want to turn on airplane mode to avoid interference. I just picked up a new ipod classic and it works perfect. If I were only going to have an older ipod to use with it though I'd sell mine for sure.

Also if your son is not ripping to at least lossless then you may want to reconsider everything since that is the most unmusical experience possible. That is listening to digital music via MP3 quality.
Just get a mac mini instead of a doc. The mac mini is $599 and is a full blown computer which will have iTunes in it, ability to act as a music and movie server and he can plug his iPod into it. Best of all it has digital out.
Hmmm... My son has an apple computer, stores a lot of music on it, and now I'm wondering if it has the same ipod in/ digital out feature that the mac mini has. Unless you know this feature is specific to the mini, I should see what the possibilities are for his computer. (I'm trying to put this part of the system together without him knowing...graduation present.)
All later model macs have a digital/analog headphone output that will do analog through a 1/8" headphone cable OR toslink with an adapter. It works incredibly well and when using for music you don't actually play direct from your iPod, but music comes from iTunes and can be digital out or analog chosen in the audio set up menu. They will output up to 96k resolution too so if you have a dac which will handle high res like the PS Audio digital link III or Bel Canto dac3 (I sell both) it will work marvelously. If I can help you with anything feel free to contact me through my web site or audiogon.
It sounds like he stores a "primary" copy of the music on his computer, so I'd definitely just look for a good DAC he can connect to that, ideally via USB. Think Cambridge, MHDT, Wavelength, etc. Connectivity directly to the IPOD is just too limiting, at this point.
I tried the Wadia and found it ergonomicaly inept. Its a great concept, but not user friendly at all IMO. I don't want to have to control it using the iPod, and the remote is worthless.

That leads me to (haven't bought it yet) the Apple TV. Think of it as a large (physically, not capacity) iPod with a Toslink digital output. Very easy to set up and control, and because it uses its own internal memory, no computer needs to be running. That also means no dropouts due to interference. The Apple TV can be controlled using a TV and/or an iPhone/iPod touch.

Going straight out of a computer is a great idea, if its not practical in his situation, the Apple TV should work very well. I played around with one at the Apple store, but they didn't have the larger one in stock at the time. I've been meaning to pick on up but haven't gotten around to it.

Also, don't base your decision on the Apple TV on the store employees. They have no idea what they're talking about regarding it. A team of 3 people all gave me contradicting info that they argued about. Among other things, they all told me that the iPhone/Touch can't control it. They also told me a universal remote like a Harmony can't. Wrong on both accounts.
Apple TV is the way to go: $225 (too bad the price just went up it was $199) for the 40GB model. It has an optical out, is extremely easy to use and sounds excellent. I avoided the Wadia becuase it clearly was "ergonomically inept" -- the AppleTV is the opposite. And you can stream internet radio at reasonably high sound quality.

Plus there's a lot of video options if that is of any interest.
also make sure your son starts ripping files losslessly. benefits of the outboard dac are ~nil if all of his files are highly conmpressed.
Thanks to all for your ideas and considerations, they are sincerely appreciated though not totally least by me. I will share with him the contents of this thread then make some decisions about where to go next. I did purchase/order a DAC (Cambridge Audio Magic) as part of the system. Any words of advice about getting the most out of this arrangement? Thanks again.
Sounds like that's all he needs.

This stuff isn't easy to figure out at first. Then the more you figure out, the more complicated it gets IMO. What don't you understand? I'm sure some of us can help you out.

The DacMagic is very well reviewed. I haven't heard it, so no comment on it. There's a ton of different settings. Like everything else in this hobby, try them and see which works best in your/his space.

As Wrtickle said, make sure his music files are uncompressed. If he's using a lossy format, nothing will make it sound better. Make sure he's copying his music with something along the lines of Apple Lossless, FLAC, etc.

As I mentioned before, I really like the Apple TV. It makes things very easy. I hate the technical and computer aspect of this hobby, and I find the Apple TV to be very good and worth the money. Its far more flexible than the Wadia iTransport and a bit cheaper.