Denim giant Levi Strauss said on Tuesday it had designed jeans compatible with the iPod music player, featuring a joystick in the watch pocket to operate the device.  Obviously, this was designed to compete with the iBoxer – iPod-ready underwear.

The Levi’s RedWire DLX Jeans for men and women, which will be available this fall, also have a built-in docking cradle for the iPod and retractable headphones. Pricing was not immediately available.

Apple Computer Inc.’s iPod is the No. 1 digital music player. The company on Tuesday attributed a 63 percent jump in holiday quarter sales in part to the iPod’s popularity and said 42 million of the devices have been sold to date.

Levi’s is not the first company to feature iPod-friendly apparel, although it may be the first to make iPod-compatible jeans.

Haute couture fashion houses began featuring pricey iPod carrying cases after the device’s 2001 launch, while outdoor company Burton Snowboards unveiled what it called the first iPod-compatible waterproof snowboarding jacket in 2003.

Last fall, Los Angeles-based manufacturer Kenpo launched men’s jackets selling at Macy’s for between $275 and $350, featuring iPod controls on the sleeve.

If you’re keeping track of iPod-ready clothing, Play Underwear also introduced the iBoxer – iPod-ready underwear.

The Play iBoxer is a cotton/spandex blend button fly boxer, with a discreet front pocket which is perfect for holding an iPod, other mp3 players or your cell phone.

We’re not sure what the point of putting an iPod in your shorts is…but if you want to impress the groupies, avoid the nano….

The Boxer is available in solid colors and the solid waistband features a racing stripe and the Play logos. If you buy 2 pairs of the Play iBox Boxer, you’ll receive 3 free iTunes.