The cheapest way would be to take a cheap 3.5mm jack -> 2RCA cable, hook it up to your stereo and the headphone jack of the iPod and turn up the volume to the maximum (of the iPod of course)
The best way would be to take a Line Out cable/module such as the Sendstation Pocketdock, Sik Din or the Apple Dock, and a decent 3.5mm->2RCA cable such as the Zu Pivot
http://www.zucable.com/pivot/price.html
Will you be able to hear a difference between the two? In some cases, yes... it depends on the "Hi-Fi" it's connected to, the source material on the iPod and ultimately your ears. There are practical advantages with the second option: Your headphone volume stays as it is and in the case of the dock, disconnection from the Hi-Fi is simple... and all the docking options can also charge the iPod as it's playing.