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The AUX input lacks any punch or clarity. It does have to be said that I am a bit of an audio geek, so I probably expect better.
I also have fairly high bitrate AACs on the USB. Were you comparing the Ycable to standard 128 MP3 files. If so, you may not notice as much difference.
I put my favourite test track (Duel by Propaganda) on simultaneously on the iPod through AUX and the USB stick and kept flicking between the two. The difference was very noticeable.
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