iPod Touch 4G music playback quality

I recieved an Ipod Touch 4G, 64GB, for Chrismas. This is my first Apple product.

As a handheld computer/game center/web browser, I really like it. It lives up to all of my expectations in that regard. However, as a portable music player, it's leaving me a bit disappointed. I discovered the joy of lossless audio a while ago and became a borderline audiophile. I'm not really anal-retentive, but I expect a certain level of sound quality when playing lossless files.

When using iTunes on my laptop (a Dell Studio XPS 1640) to play Apple Lossless files I've ripped from CDs, the music sounds crisp, warm, and clear. However, these same files played on the iPod sound overdriven and tinny, and all the warmth and depth of sound is gone. Bass tones sound distorted, and quite a few artists voices sound like they're singing while holding their nose. This is not just with the lossless files, but also with my 256kbps purchases from the iTunes store.

I don't have iTunes set to copy all the files to the iPod as 128kbps, and I used the same Sennheiser MX-160 earbuds on the laptop as I did on the iPod. I'm currently going through some of the higher-rated equalizer apps in the AppStore to try to solve the problem, but none have been able to make the iPod match my laptop. I have also tried the iPod's built-in EQ settings, but those only took the already-poor audio quality and made it varying degrees of worse.

As I've said before, overall, I really like the iPod Touch. I'd like to keep using it. However, what's the point in having an iPod if it doesn't fulfill it's primary function, that of a portable music player.

Thanks for any answers.