Here's a good place to start
Usage may vary, but it's a great option to have in a portable device, especially if you also have a portable (or non if you'd prefer) DAC (digital to analog converter) with which to connect it to. This will totally bypass the iHP's internal DAC and provide you with a whole other level of sound quality, in combination with a good external source (receiver, pre and pro amp etc..)
Look at it this way, get yourself a iHP 140, throw an 100 gig (or more if one fits) HD in it, load it up with FLAC files, and hook it up to a great external DAC and amp, and you've got a premium system right there.
For a more technical explanation, if Shadesbass is around here at some point, he'd be THE man to give the dissertation ! Though I'm sure that there will be more than a few people chiming in here in a while..
Doug