Music makes me code faster. When I am going into a code grind I will pop in some electronic music and start kicking some ass. The repetitiveness of the music really helps me with writing some of the same statements over and over. It also gives me a flow to keep up with. This type of music also makes it easy to tune out when I am working on a more critical section of the code.
If I was told tomorrow that I am not allowed to listen to music at work, I would immediately without even thinking twice start looking for a new job. It really sounds like this is the type of boss who would complain about me taking a 5 minute break to read Slashdot or whatever. Not the type of company I would work for. Treat your employees like humans not slaves, and you will get far more productivity out of them. Humans need a few minutes of casual browsing to help break up the day and reset them selves for the next steps in a project.
I couldn't work in an office that was completely silent. That's more distracting then anything and would drive me crazy.
Now of course I use headphones all the time. It would be very distracting to be forced to listen to a style of music that you aren't into. All coders are into different styles of hacking music. I know some that are into speed metal where others are into classical. Whatever works for ya.
When I am at home (working on my own projects) I will generally have a movie playing on the other screen. For the most part I don't really watch it except for the really cool action scenes. I watch movies that I have seen a number of times so I don't have to watch every little part.
A wise man told me once that you shouldn't look for a good job, look for a good boss.