Some writers use music to set the mood while they are writing. They may listen to a specific time period to conjure a mood or get into the mindset of a character.
In general, I’m not one of those writers. In fact, I rarely listen to music at all when I write. I find I can get distracted by it. Music can transport me to certain time periods in my life. This doesn’t help me get into the mindset of a character.
The only time I’ve used music while writing is to focus and tune other people out. Sitting in Panera some of the conversations can lean towards the loud side. Music I haven’t chosen (generally heard through the speakers of the person next to me) usually makes me mad. If their iPod is turned up that loud, they should have their hearing checked and take their noise pollution elsewhere. But that’s only my opinion. 
I’ve tried to think of writers who use playlists and I can only think of two: Carrie Vaughn and Stephenie Meyer. Can you think of anyone else who uses playlists? If you write, do you listen to music?
I write with music because I almost always have music playing, and it’s actually less distracting to me to have the MP3 player going than to be listening to my ‘internal radio’. I very rarely have specific play list for specific stories or characters, though – once in a while, but not often.
I find myself thinking about the lyrics and amazed someone can tell a story in a 2 – 3 minute song.