I quite understand why people don't like to cycle while listening to MP3 players.
I drive with music or Radio 4. I drive everywhere like that. I am sitting in a comfortable, cosy environment designed (in theory) to give me a good view of where I want to go, where I don't want to go and where I've been. I have three mirrors and a bunch of dials and gauges to keep me abreast of my speed and the state of the car.
When I cycle in the countryside and into the Malvern Hills, I have my left (nearside) ear atached to an iPod. My right is unadorned. Once I'm back in a town, both ears are unadorned. In London and other cities, I wouldn't dream of wearing an iPod. In a car, I have no such scruples.
It's not the ton of metal or the side-impact bars that allow me safely to listen to music in my car. Safety and security in a car seem to me to be less a function of one's aural awareness of the environment than it is on a bicycle.
I do not know exactly why this is. When the Sony Walkman first appeared, I wore on to ride to work on my pre-war sit-up-and-beg bike. I was nearly splatted within a mile of home and swore I'd never use one again on a bike.
My wife and children are thoroughly against my use of an iPod while cycling, but the one-ear thing (and rural use only) seem to do it for me.
I have never known anyone who feels that they (or other drivers) are distracted by talk radio or music while in charge of a car. Is it because the music comes from the dash and the door panels rather than a thingy in your ear?
I don't know. But I do think the direct comparison is invalid, even though (like the OP) I do both.