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The new ipod classics utilize a Cirrus Logic DAC. Older ipods -- up to generation 5(?) -- used the Wolfson. Haven't directly compared the old ipods to the new, so I can't comment on which is better, but it seems the Wolfson are preferred on most boards.<br /><br />The X3 can play a greater variety of lossless files than the IPC. If you're fine with ALAC or rockboxing your IPC, then this isn't an issue. Also, the X3 has a line out and digital coaxial out so that you can connect it to an external DAC or amp. Those, IMO, are the primary benefits of the X3 over the IPC. Plus you can just bring a couple of microSD cards if 64GB is not enough.