Despite the often poor audio quality of the music stored on it, the iPod is the most important audio source since the compact disc. Today's home theater systems are seeing more and more creative applications for integrating an iPod into your AV rig. One curious twist is that Applewill not allow AV companies to hide or recess an iPod into the electronics, which means the iPod is placed partly above the component.
The cutting edge of iPod docks try to replace some of the resolution of the music that is lost from the terrible quality of songs purchased from iTunes. These songs are, at best, one-fourth the resolution of what can be ripped from a compact disc and far worse than the HD downloads you can get from Music Giants.
Products like Wadia's iPod dock and Krell's KID/PAPA DOC are at the pinnacle of their category. Many high-end iPod docks like these offer better sound quality than just plugging the iPod into the receiver with an analog cable.
Another possibility is something like the Apple TV, which will stream a signal from the computer where all the music is stored.