Of course you can listen to music in a car while driving! That's why they have radios in them as standard fit (even German cars!).
It doesn't really matter if you miss what the presenter is saying. When one misses an ATC / aircraft call however... It becomes another matter.
I certainly wouldn't be impressed by someone whipping out an iPod (or whatever) on the flight-deck. It would smack of an unprofessional attitude.
Nor would a student of mine be allowed to do so, while in the GF, or on a cross-country. In fact, I would tend toward a bit of disciplinary action if I were to find out about it.
BUT... Alone, out where there's no-one (yes ... there are lots of places like that where I am / fly), while gliding, or some other non-commercial operation, and there's nothing to say or hear on the radio... Go right ahead and listen to music. Just no Hip-Hop or Rap, 'coz it's simply bad taste to listen to that kind of stuff, and you know what a classy bunch we are.
Come now... Let's not be too anally retentive about this chaps.