axon01, take a look at the block diagram for the AMS AS3525 SOC. It may answer some of your questions. The system chip has 3 independent audio outputs on chip: headphone amp, line out and speaker amp. All of their inputs are driven by a common signal with the DAC and AGC limiter upstream. Easily manipulated digitally before the DAC output. Note that the line out output does not feed the headphone out input. This may clear up some confusion.
Google for AustriaMicrosystems AS3525 to find the function sheet and block diagram. Sorry, I do not have a URL handy.
