if u go the ipod route:

try an altec lansing im4 about £60

or jbl onstage nearer £100.

another alternative is the apple airtunes, which picks up whatever itunes is playing upstairs, and plays the same through the hifi through which it is connected. you'll need a wireless network for that.

i agree with andrew, neatest solution is the squeezebox, lots of threads here about that. (but you cant go out with the squeezebox in your pocket)