I think an iPod is ok and safe. I don't listen to it too loud though, I can still hear my chain shift, cars, etc.

Have you ever heard a car and dived off the road in order to save your life? I hear 'regular' cars just fine, i think i'll be able to hear any 'killer' cars that announce themselves as such. (i'm being a little sarcastic, hearing a car isn't going to tell you if it's going to hit you or not)