My view for what it's worth:
People with their iPods and ear buds/head phones on should have enough presence of mind (and courtesy), to be aware that they may not be able to hear a call-out from another rider every time. Personally, in a society where we are inundated by technology each day, music included, the absence of manufactured noise and distraction is what beckons me to ride well away from the urban maze, more than any other motivation.
If you can't discern a bell <ding...ding....DING DING DING!!!>, or a call-out at normal volumes, then either turn down your muzak volume sufficiently, or remove one ear bud, or always stay well to the right of the fireroad, or stay off the trails entirely, if you can't use a little bit of judgment.
I have had worse times with walkers and runners on this issue more than cyclists, however. Talk about being oblivious!
You may be in your own little world at the time, but you're sharing mine and hers and theirs, too, so be aware of it. If you have a close call and get a fright, it's your fault, not the person who tried to get your attention but couldn't after reasonable effort.