Although I don't listen to music while playing because I like the game soundtrack so much...
I generally play without music during serious games, but it's not because I enjoy the game's soundtrack.
My Top 25 list (somewhere above) represents what I'd be listening to, if music was required during gameplay. This topic was really just a convenient excuse for me to provide examples of "stuff I like".
I like to distract the "conscious" part of my brain (usually with an audio book or lecture of some sort) because it seems to make me play better. I get involved in what I'm listening to and the gameplay just becomes a series of autonomic responses. Whereas if it's JUST the game I get bored and impatient and start pushing things too hard.
That's a very good point, Chris. I imagine it's analogous to the natural hypnosis people experience every day, effortlessly performing one task while primarily focused on something else. An example would be listening to an audio book while driving, arriving at your destination, and having no real recollection of what happened between points A and B.
I believe that music would enhance my gameplay, in the manner you've described, with one notable exception. If the game sounds are overpowered by the music, I find that it negatively impacts my ability to gauge the duration of the hammer cycle. Your preferred audio source (book/lecture) might be less intrusive (sparser sound?).
How about a MAME plug-in that auto pauses one's media player while the hammer is active? Useful at first, but incredibly annoying after 10 minutes (less than 2 complete DK levels).