It's believed that most iPods carry the Wolfson Microelectronics WM8975 codec and although it does a great job converting the digital audio on the iPod's drive into analog audio, the iPod's amplifiers don't make the sound loud enough to hear through your headphones. Take a look at this instructional video and learn how to mod your iPod so that it'll bypass the iPod's amplifiers and run the audio out from the Wolfson DAC to your stereo. Keep in mind that this process requires breaking into your iPod and some soldering. Don't attempt this if you're afraid to break your iPod because this will most likely null your warranty.
Start your career in Graphic Design with the WonderHowTo's Beginners’s Guide to Photoshop Course