Etymotic Research's hf3 headset earphones — $149
When it comes to noise-reduction technology, I have long expressed my preference for what is called "passive" noise reduction over the "active" kind. Active headphones cancel noise by listening in real time to the acoustic environment and then generating counter-noise and bringing that mix to the listener. This approach requires battery power and doesn't always work effectively in some conditions.
Instead, the passive-style earphones fit inside the ear canal to block out the noise. There's no batteries to run out. They just work like ear plugs with tiny speakers (except there's a lot of acoustic science to make them sound right).
With my iPod, I use a pair of Etymotic Research ER•4 MicroPro headphones, which I admit are expensive with a list price of $299. And for my iPhone, I use the company's hf3 headset/earphones. Yes, Apple keeps improving the iPhone adding extra microphones to introduce noise reduction. However, real clarity comes into play when you are "isolating" out between 35 to 42 decibels of noise. You can really hear the caller.
Etymotic also offers interesting software for this headset called Awareness! This app is used when customers use the headset as earphones for recorded content. The app performs "programmable noise isolation," which is a twist on the active noise reduction system. Awareness! listens to the environment and then boosts certain, programmable noises that you might want to hear, such as an announcement at an airport. It's a free download.