You've come to the right place for lots of advice, from a bunch of audio lunatics.
If hubby is down for a 'pod, no problem. The Wadia is the only 'dock' available THAT I KNOW OF, which gets to the digital output of the 'pod. ALL others are like plugging in a set of headphones, with all the limits of the Apple's electronics, which frankly, ain't that high. I use a pod in my car which is fine. Also, to make best use of the I-pod in a home system, you need to figure out a few things like 'lossless formats', which means that MP-3 is not on the list. Using a stereo of even medium resolving power, most people can tell they like the lossless files better than MP-3, even if they can't tell WHY.
Another way to go for home use is to get the computer involved. I use a MAC, so may be considered a snob, but this will work for a PC, too. When I get this together, around Christmas (HINT HINT) I will be able to send a wireless, lossless signal from my confuser to my stereo in lossless, (Apple Lossless, actually) format and put ALL my cds on the computer and use the computer as a gigantic Ipod. There are other lossless formats available, FLAC, for example is supported by WINAMP player, (freebie) among others.
That being said, I listen to lots of XM radio. This doesn't sound any better than MP-3s, really, but is just so darn EASY. This may trump ultimate sound quality. Getting at music I never heard (new) or all the 'oldies' is just too attractive. If I bought even 1/4 of what I hear on XM, I'd be broke.
You may want to spend an hour or more 'with the girls' at a local hi-end shop. (support network) This will get your ears tuned into what is better about hubby's setup. You simply WON'T believe how much you CAN spend on just a 'simple' stereo. Bring a Prozac, and be thankful. It could have been MUCH worse!
Many of the denizens of this site spend mid 5 digits on what is ostensibly a hobby. Total career expenditures can run EASILY to 6 digits, since many go thru 2, 3 or more setups over a lifetime. Yes, I know you'd rather spend a couple weeks in Hawaii, but here you are!
Be thankful that hubby ISN'T (is he??) into old cars or photography....Now that'd REALLY run into some cash.