You just cannot complain your ipod touch 1g does not sound good with these kind of headphone.First buy new headphones (atleast NE7M/RE2 both costs under $ 50 ) and try with your ipod touch 1g.If you buy something like monster turbine or RE0 ( both over $ 100) nothing like it
if you really care about SQ,this combo will sound way better than any other "best sounding" player + your old headphones
Ipod touch 1g is not that bad sounding player,problem is its sound is colder and more analytical.We need some kind of warm headphone(Nuforce NE7M/Monster Turbine) with it