Is it safe to listen with headphones while cycling?

One of the hotly debated issues about cycling is whether or not it is safe to cycle while listening to something through headphones. I can certainly understand the view that it is important to be able to hear what is happening around you as you cycle. I personally like to use the time I spend on my bike to catch up on podcast episodes and/or music. However, I would like to do so safely.

I tried using the Around Sound application which is a cool application fro Android devices which measures the ambient sound and automatically pauses your music/podcast whenever the ambient noise exceeds a threshold. The intended use of this application is when you might be listening to music while working in a quiet office environment, but when your colleague comes up behind and asks you a question you would like your music player to temporarily pause to allow you to hear him/her. However, I found that I could not find a suitable volume threshold setting that worked well while cycling. Instead I use a low-tech solution of only attaching one of the earphones while leaving the other ear free for listening to traffic. In order to protect my ears from any potential long-term damage from earphone use I constantly switch ears.

Research shows that the biggest factor in determining the risk of using a mobile phone while driving is the content of the conversation. Apparently you are at much less risk of crashing while having an idle gossip with the phone held to your ear than if you were conducting a stressful interview through a hands free device. Using a similar logic I choose to make sure I am not overly concerned if I actually hear all of the items I listen to while cycling (e.g. I listen to a general chat about the news of the day rather than trying to take an on-line course which would require me to pay close attention - therefore if the traffic situation requires my close concentration, I am not worried about missing part of what is said on  the podcast.