Does the SB duet have stereo rca outputs? I would like to use my Transparent Audio interconnects to connect the SB to the preamp.
Yes, the Duet does.
Is the 24 bit DAC similar to the one on the Touch model?
Similar, yes. Identical, no. The Touch, being newer, has a better DAC.
Is their any difference in the SQ between the Duet and the Touch?
I'm sure there is but I'm also sure it will be negligible.
Is it worth spending that extra cash on the Touch?
Yes!
How would the dac on the iPod Classic, compare with the dac on the Duet or Touch?
The Duet/Touch are entry level audiophile grade products running the Wolfson chip. The iPod is a convenience. No comparison.