The sound quality, as you might expect, is quite good, and the loudness is nice too. For better or for worse, it's got the signature Bose sound (loaded low, with great highs, and a bit deemphasized towards the middle), but overall, this thing sounds great.
However, this product has unadvertised problems with the 3rd Generation iPods (black and white screen, dock connector, four buttons and a touch-wheel), and I'm glad I discovered this in the store before paying the full $400. When plugged into the Sounddock, the screen freezes, and neither the remote nor the buttons can advance the track. The ill effects cease the moment the iPod is removed, but nonetheless, it's more or less unusable with this early iPod. If you're thinking of trying it and have a 3G iPod, I'd recommend looking elsewhere, or at least going in to a Bose store to double check and make sure that you too don't experience this problem. Bose has heard about it, but apparently it's not a fixable issue, just a question of old technology.
So, I'd definitely recommend this product acoustically, but practically, I'd make sure you're using a more recent model of iPod before you give it a shot.