Much was made of a noise problem in the headphone output of the Wadia 121 Decoding Computer on Headfi.org. As it should be. I for one would be more than a little verklempt if my new super digit machine used my headphone output as a strainer for hash. Hash is bad for your arteries, and unlike the kind we serve in New England, it's no better washed down with eggs and coffee. Whatever the issue was, it's been fixed. Michael Lavornga wrote about the 121 on his excellent site, AudioStream.com. Basically, he found the Wadia 121 to be a step up from the dedicated headphone amps he had on hand...(primarily sub $600 dedicated headphone amps.) I believe you'll find this in the i-Dac review.
Having had a 121, chair and bed side for the past week, I must concur. I've sampled the Wadia 121 with Headfi from Sennheiser, HiFiMan, AKG, Beyerdynamic, Fostex, and Earsonics. The result have been fantastic. To relegate the Wadia 121 to a position of a DAC, that as an afterthought incorporated a headphone output is to terribly short change yourself and the Wadia. It has both high and low impedance settings to get along well with most comers.
The only limiting element is the sole 1/4 inch output for headfi-ers. There is also a tremendous gradations of volume via the remote. Also as a Wadia Dealer, I'll be pushing for a reference Wadia Headphone Amp. It would be interesting to see what they could do if they pulled out all of the stops. Tune back in the not too distant future for a walk through of the Wadia Intuition!! Talk about a serious one box solution!!