A recently published study by Dario D. Salvucci, Daniel Markley, Mark Zuber, and Duncan P. Brumby in the Department of Computer Science at Drexel University has been making the rounds, since it's the first bit of research to confirm what everybody knows: that manipulating an iPod while driving isn't the safest of ideas. I'm willing to bet that most people who listen to iPods while driving at least occasionally select music or podcasts on the iPod when they should be paying attention to the road and surrounding traffic. (I confess - I've done it too, though after reading the full study, I plan to curtail iPod manipulation as much as possible while the car is moving.)
The primary finding of the study was that the act of making media selections from the iPod caused significant "lateral deviation" - in other words, the car swerved from the center of the lane. The amount of deviation for making simple selections on the iPod were comparable to what was observed in drivers dialing a cell phone (another dangerous activity that all too many people perform regularly), and making a complex selection on the iPod caused even more swerving than dialing a cell phone.
On the plus side, merely listening to audio and - I shudder to imagine this - watching video on the iPod while driving did not cause notable swerving, though test subjects who were watching video did slow down significantly, which probably accounted for why they could keep the car on the road. Selecting media on the iPod also caused drivers to slow down, which is good from the standpoint of reducing the mental requirements of driving, but bad if you consider that an unexpected reduction in speed is itself a traffic hazard.
There is one simple thing Apple could do to make iPods easier to use in cars. When a podcast episode ends, the iPod stops and returns to the main menu, forcing the user who wants to listen to the next episode to navigate to it manually, which is far more effort than merely pressing the Pause button to stop the next one from playing automatically. As far as I can tell, the workaround for this is to create and sync to the iPod a smart playlist that selects all the episodes of a particular podcast. Or, on the iPod, select the podcast's name (one level up from individual episodes) and press and hold the center button for a second to create an On-The-Go playlist. Then if you play the podcast from the playlist rather than from the Podcasts menu, the iPod will play through all the episodes in the order listed. I always do this with especially short podcasts like NPR's Story of the Day, where each episode may be only three or four minutes long.
Although the Drexel study was performed with a 5G iPod, I'm sure the results are at least generally applicable to any other music player not integrated into the car's own interface. In fact, the iPod is likely among the safest, since it is generally considered to have one of the most fluid interfaces available in portable music players. Interfaces that are more difficult to use would undoubtedly require more attention that's best concentrated on the act of driving. Plus, the device used to hold the iPod at a usable position in the car also plays a role in ease of (and therefore safety of) manipulation; see my comparison of a number of iPod car adapters for details on those I thought were best; it's in "Simple iPod/Auto Integration" (2006-07-17).
So hey, iPod users, be careful out there.