I assume you want to have the C565BEE do the digital decoding and not the iPod itself as Muzikat suggests by using the mini jack input on the front of the 375BEE integrated... Unfortunately the USB input on the C565BEE really wants to see the mp3 files as if they are on a flash drive or a USB hard drive. The iPod does not work this way and requires some other kind of hardware.
If you want the 565BEE to do the decoding, then yes, you would need a dock like the Wadia 170i (assuming it has an optical out, cause the 565BEE only has an optical in, no coax in.)
I am pretty sure about this, although I must admit I have not plugged an iPod into my 565 just to be sure... I don't recall the manual saying anything about iPods either.
I often think that maybe I should have kept my old CD player and just bought a Dac Magic...