what is the function of a headphone amp?
I purchased an amp from Total Bithead. I had a pair of AKG cans (forgot the version). They were meant for mixing/mastering music, and therefore had a very flat sound, (no playing around with the bass output like Monster and Bose).
Because they are intended to be used by audiophiles and professionals, to use them to listen to a portable device such as iPod or Macbook, you need to boost the output of the device to get a decent sound level.
That's where the amp comes in. I think I paid about 100 bucks, and got a portable version that technically can be carried around like your iPod. The difference is quite noticeable, but you don't need an amp for every headset.
There are several good sites that explain this much better, and in more detail, such as those mentioned previously in this thread. I'm glad I purchased mine, but I don't need it with the majority of my headsets.
I have the Shure 440's, and they are awesome, but don't need an amp with iPod. My Shure lower end in-ear headphones also don't require an amp. If your headset says, "Studio", or "Professional", chances are you'll need an amp. Hope this helps.