I do the same thing. I generally listen to audiobooks while I'm knitting, but if I'm doing something more complex or something I'm struggling with, I'll switch to music so I don't miss too much of the story. I've also gotten into the KnitPicks podcast, but that only comes out once a week or so. I usually pick audiobooks I've already read so that it doesn't take too much concentration to follow along. But I really need the brain stimulation. I get bored too easily (unless it's complex knitting) if I'm just listening to music.
When I do listen to music, it's just whatever I'm into at the time and what suits my mood. Like right now I'm really into Feist, Hellogoodbye, Imogen Heap, Belle and Sebastian, Kanye West, and Shiny Toy Guns. I've also really gotten hooked on my friend's band from when he was in college in South Africa--they were seriously good and it's kind of that ethereal, Tori-Amos-type style. They actually had a #1 hit over there.
If I'm in a "softer" mood, I switch to jazz like Cassandra Wilson, Nina Simone, Dave Brubeck, Charlie Parker, Thelonious Monk, and Branford Marsalis. Or Motown. I LOVE Motown!
If I'm all revved up, I switch to late '90s/early '00s Euro-house. I know, I'm weird. I have really random taste in music