If you watch some of the presentations Jobs gave e.g. during his NeXt days it's pretty clear that he absolutely understands every bit of the technology as good as any engineering manager. The ability to combine technical knowledge with exceptional design, marketing and product development skills is what made him vital to Apple's success.
Important distinction: understanding the technology != coding. I think alot of folks who worship Jobs here believe saying he couldn't code is some sort of ultimate insult. It's not; he understood his products. I've met many programmers who have no clue about the product they're building, and some who barely grok the tech outside of their area of responsibility.
If you watch some of the presentations Jobs gave e.g. during his NeXt days it's pretty clear that he absolutely understands every bit of the technology as good as any engineering manager. The ability to combine technical knowledge with exceptional design, marketing and product development skills is what made him vital to Apple's success.