Interesting idea, and closer to working for me--but not there yet.

OK, I am listening to MP3s. My colleague wanders up, and I pull off the headphones. Do I stop and pause the music, negelecting my colleague? No. This leaves the music running. OK, following our conversation, I dive into work on project A -- not putting my headphones back in. They lie there on my desk, quietly buzzing away. (I don't generally crank my headphones.) Now when a travelling colleague who has only my mobile number in his blackberry rings me. I don't hear it, and project B has a sudden crisis what could have been avoided.

I think we've discovered a third option that some people might want. and the setting does need to be controllable.