I skate with an older ipod nano (the new ones are so small they would be ideal) in my fleece pocket. I run the headphones on the inside of the jacket, rather than outside. I just wear one earbud when I do. It's not ideal, mostly because I hate earbuds, my ears are too small for them. They do come out when spinning, for me.
We have lots of kids who skate with them, and most are just clueless as they listen to music, so I almost think they should be banned...
I've never heard of one breaking, so I don't worry about it.
I've had my coach skate with my smartphone next to me before, but it's too soft for anything but emergencies. However, it plugs right into the music system, so many skaters use that instead of CDs now. I have like 10 CDs for practice since I always lose them, so I like that option, keeping CDs just for competition. I do worry it will be knocked off the boards though, but so far, I've not heard of an accident. My phone also does great video, so I like having it rinkside.