I never use my iPod when riding outside. Not only would it make it harder to hear cars or other cyclists coming up behind me, I find it kind of distracting - makes what I see in front of me seem less real, more like a video game. It's exactly because it's distracting that I HAVE to listen to music or an audio book or something like that when I ride on the trainer or a stationary bike, so I can be off in my own little world. Being in m own world on the street wouldn't be a good thing.

I understand others' mileage may vary, that's just my answer.

BTW, I participated in a major event ride this past spring and using earbuds (one or two) was forbidden - you could get pulled off the course for it. People still did it. With 3000 other riders of all abilities around you and being on an open course to boot, that seemed scary to me.