If your born funny and somehow the act of listening to soothing music while pedaling causes you to self destruct, implode, spontaneous combust, or get instantly flattedend by passing cars, then DONT DO IT !
If your like most people and actually capable of cycling while chewing gum and seeing with your eyes, and able to actually distinguish two seperate sounds in your brain, such as say...music and a car horn, then by all means, go for it.
A car thats about to run you over sounds EXACTLY like a car thats about to pass you safely.
You should already be traveling as far right as is safe for the current situation, so wether you hear that car 800 ft back or only 400 ft back, it shouldnt matter.
If you play your music so loud you cant hear traffic, then make sure your insurance is paid up.