My friend and reviewer Michael Fremer loves his iPod when traveling - but he doesn't think a lot of digital audio - preferring vinyl instead.
Here's what's interesting: Michael digitally records his favorite music from his turntable and transfers to his iPod. Indeed, I can attest to the wonderful sound he gets.
Does this mean digital audio as a medium is ok as long as you pass it through the filter of transferring to vinyl then back again - or is something else going on? I believe something else is going on.
My experience suggests that it is the differences in mastering for vinyl vs. digital audio that makes for improved sound. When you transfer music from one medium to another (tape to vinyl, digital to vinyl) you have to set the audio parameters to match the medium - and I believe it is this final step to mastering that makes the difference.
It would be instructive to master for vinyl but transfer only to digital and compare.
I'll bet this would be eye opening.