Most of us need some sort of distraction while working out. Be it an iPod, tv or newspaper, whatever as long as it takes the focus off the actual working out process.
A recent report on CNN found that these distractions are great, as long as you're not training for a race or some athletic competition. The reason is that if you are training, you really need to be extremely in tune with your body (and your breathing) and being in tune with your iPod could prevent that. A lot of marathons do not allow runners to use music, so if you're planning on running a marathon anytime soon, you may want to ween off the music.