Gasp Wadia ipod dock or rega appollo cd

I know guys this is scary to discuss

I own an ipod and plug it into my classe cp-35 preamp line level. I also have all my mp3 recorded at 128 bit gasp not lossless also keep in mind i do not own a dac for the wadia ipod dock.i also have everything in my ipod backed up to cd-r and i have read the rega appollo will play mp3 disk
Which setup would give me a better sound
I am sort of leaning toward the rega it is sweet looking to me
But i also had some sweet looking mean girls.

Opinions tech junkie agoners
You can get a great sounding DAC for cheap these days. I would get the Wadia and a Cambridge DAC magic. Not sure if that is over budget but that would sound great and be a lot more fun than playing CDs one at a time. Or I have an even crazier idea. Get a Mac Mini and run an optical cord to the DAC Magic and you will have even greater control and will then be part of the future not the past.

You can get some pretty good sound out of even 128 mp3s. I had a friend over last night and played him the same track. One was downloaded at about 175 and the other was ripped by me Apple Lossless. He picked the MP3 as sounding better 3 out of 4 times. I thought the Lossless version sounded better but I knew what was playing. I bet there would be some shocked audiophiles when they discovered that it's not that easy to tell MP3s apart from full rips. I'm not trying to say MP3s are better, but they don't sound so god awful you can't even listen to it either. Reminds me of when my nephew the wine connoisseur picked the 2 Buck Chuck over the expesive stuff.

But that said hard drive space is cheap and your time is valuable so I'd say rip to at least 320 if you are going to the trouble.
Thank you ejlif

Some very interesting stuff all the options sound good
Mac mini sounds neat

All my mp3 were made about 4 years ago and you mention changing disk with the rega yet i have over 300 cdr and each one has about 7 albums on it
They play in my dads cheap sony dvd player
I did have an adcom gcd700 but it kicked the bucket so i dont know if the disc would play on something of that quality is it normal to have 7 albums worth of mp3 on one disk or did i do something wrong. I mean i have every beatles studio album on one disk

That $2 Buck Chuck sounds great