You can go direct out through a high quality mini to RCA cable.
I went a different route. I use a dedicated PC with a 400 gig hard drive. I transferred my CD collection in WAV. I leave it on all day with iTunes running to act as a server. I keep a Roku M2000 running through a Musical Fidelity X-X-DACv3, X-PSUv3 & X-10v3 into my B&K 507 S2. I also run a Roku M1000 in my kitchen and garage. Really cool product.
A month ago I didn't even know anything about iPods, Rokus, headphones, etc. Then my business associate gave me a shuffle. Now I'm importing CDs to my hard drive all night, using a 60gig iPod for WAV, a 20 gig and 4 gig for 320 kbps MP3s, using 2 dedicated headphone amps (SR-71 and Musical Fidelity X-Can V3) and have 4 headphones (Sennheiser HD 650s and 595s, Etymotic E4S's and Shure E5cs).
Fortunately all that stuff is not nearly as expensive as main HT theater components. I highly reccomend the Roku route. They sell an M500 for $150. It has all the functionality of the bigger units but a cheaper display. If you have a good DAC, the quality of your files should be the only bottleneck to getting excellent sound and an incredibly convenient jukebox.