I have an iPod cable from Ram Electronics similar to this, but without the USB drop. Wish I'd gotten it that way as it enables you to keep the iPod connected to AC power. Even so, this type of cable (and the RAM is a well-made cable) extracts the analog audio from the dock pinouts, thereby bypassing the iPod's opamp behind the headphone jack.
However, the best analog sound I've extracted from my iPod Touch is by using a Zu Pivot mini-to-RCA cable. The Zu cable is so much better that it trumps bypassing the opamp with a mid-level cable.
However, the best analog sound I've extracted from my iPod Touch is by using a Zu Pivot mini-to-RCA cable. The Zu cable is so much better that it trumps bypassing the opamp with a mid-level cable.