The home dock really is for convenience sake. It is nice being able to just dock it and automatically have power and audio out without having to do all the plugging and unplugging.
I personally think the fixed audio-out does give you a bit better SQ because in some cases when you use the headphone jack you can turn the volume up too much and get distortion. There is also an included headphone jack which is not fixed, meaning you can adjust the volume using the volume control on the G2. But when docked and using the audio-out you must use the volume control of the speaker system you are connected too as the volume is fixed.
I have a couple of these docks and I don't use them as much as I did before the iPhone Slacker App came out. But I do still use them periodically.
By the way you can also sync using USB with the dock too, though I always downloading new content was easier via wifi.
How do you guys have it hooked up? My old Onkyo does not have a aux input and the rca red and white does not sound all that good.
I just got a new Onkyo that has the front portable aux input. This makes the dock worthless other than to charge the G2 or people with rca only.