My suggestion for a DIY iPod dock/speaker: buy a sick BOSE SoundDock at Good Will or eBay and tweak it. Bose SoundDocks have good sound and a nice design in a compact enclosure.
Many SoundDock fails, but are easy to repair: my comments will focus on the SoundDock [SD] failure modes, based on the forensics of five SD's that failed within three years.
Main failure [5 out of 5] was due to the SD iPod Connector [SDiPC] that seems to be more fragile than other iPod connector e.g. drugstore $9 iPod dock connector. The SDiPC uses thermoplastic as insulator/guide between the 30 pins; these guides peal off easily, exposing the pins that will be bent sooner or later for lack of support. The SDiPC is secured to the printed circuit board [PCB] by metal tags soldered to the PCB; these thin tags break easily due to the strain of the iPod insertion. Bose does not offer replacement parts, but Ridax in Sweden sources at a reasonable price+shipping the parts [iPod connector, surface mounted 0.5mm] that Bose should have been supplying.
Another failure [3 failure out of 5 i.e. 3 SDs had two failure modes] is the Power connector for the +/- 18VDC power pack: the connector can be inserted the wrong way, and becomes loose during use because it lacks any lock or strain relief. The problem can be solved by re-inserting the plug and jiggling it until the SD works. Good engineering could have avoided that problem. Hot glue will solve that issue.
The SD uses the iPod connector as signal source & ON/OFF switch; this make the SD extremely hard to debug and to use once the SDiPC has failed. Good engineering would have built [a] some kind of diagnostic mode with LED/LCD output to ascertain the status of the SD i.e. power ON, signal present, etc. [b] an auxiliary input e.g. jack to spare the SD the fate of a $300 device that works but cannot be used: dumpster or [light] boat-anchor. Fortunately, it is quite easy to add a power LED and and added AUX line.
Hope this helps.