From the Bicycle Helmet Safety Institute
http://www.helmets.org/bcstudy.htm
#5
Background
Several deaths of cyclists have been reported in Ontario that were linked directly to the use of stereo headphones. We have all seen people riding bikes or driving cars seemingly completely in their own space and little aware of what is going on about them. Cyclist users of headphones, indeed any users who are engaged in an activity that may pose dangers to themselves or others through inattention to what they are doing, should be made aware of the dangers inherent in the use of these headsets in certain situations.
Recommendation
A study should be conducted into the incidence of stereo headphone use in conjunction with bicycle accidents with a view to supplementing bicycle education programs about the dangers of such use and, depending on the outcome of the study, consider recommendations for the prohibition of such use in certain circumstances.