I was going to necropost, but even then there simply wasn't an ideal thread, so here's a new one.
The newest version of iPeng (1.3) now has playback support, courtesy of third-party code, likely from the Squeezecast developer, but I'm not sure about that. The update is free but playback will cost $4.99 as an in-app purchase. It's fair considering you'd otherwise need a separate app for this purpose, and it's a great deal when compared to any stand-alone hardware for the purpose. I just wish I hadn't also paid for Squeezecast previously.
You can now use an iDevice as a complete replacement for a Squeezebox - I think Logitech really missed the boat here. They could have monetized this themselves. Then again, development seems to have been scaled back a lot over there and I doubt they'd have the resources to dedicate to such an effort. It's taking them an unusual amount of time just to release point updates to the server software.
I'm not very likely to buy one of the newer Squeeze products such as the Radio now that I can easily carry the iPod or iPhone outside connected to a portable speaker dock for music on the deck.
I'm wondering when someone will install a small PC running the server software in their car with an ad-hoc wifi network, using an iPod or iPhone on the dash to stream music. It should also be possible to stream your collection over a 3G network, but I haven't yet looked into exposing the server to the internet at large. Not to mention I've only got a 250MB monthly cap on 3G service.