My son has the same generation of Nano, which he plays at foundation-shaking volume through a
Bose SoundDock (present from over-indulgent rich uncle).
However, we have a bog standard Sony compact hi-fi in the kitchen with a standard iPod dock plugged into the aux port, and that does the trick perfectly well enough for me - with my rubbish ears, I'm not sure I could tell the difference in quality between that and the SoundDock in a blind test.
I've also tried playing the iPod through a Cambridge amp and Pioneer speakers combo that I got very cheap from Richer Sounds some years ago. It makes an ENORMOUS noise - I've yet to dare turning the volume dial up past 3, never mind all the way to 11.
But whatever you plug your iPod into, bear in mind that the quality of the sound it puts out will be affected by the level of encoding of your music - if you rip CDs at a very low bitrate, they won't sound good even on the best equipment. You might not notice the difference in quality if you only listen through the crappy earphones that came with your iPod, but you'll definitely notice the difference when you play it through a halfway decent amp.
If you just want better sound quality through your earphones, get a pair of Sennheiser CX300s, as mentioned upthread - my wife has these and they give a superbly rich and deep sound. Or, even better, get CX400s - I've just ordered a pair of the latest generation CX400s based on
Valiant's review, priced under £30 from Amazon. I'm keeping my fingers crossed that they aren't so cheap because they're knock-offs - will let you know the verdict when they arrive...
d.