Music is awesome. I turned it off. Do not think I will ever turn it on again. One story that probably would not have happened with music on (actually I told this in the "top 5 mods you use" thread in the mod section):
I use the mods "Realistic lighting" and "immersive thunder". The first makes nights really dark - just the way nights are. The second one makes thunder a force. You really believe there is a storm going on. And that the gods are angry.
So I am on my way from Whiterun to Windhelm. It is dark night, only a torch lights my way. Somewhere along the way a storm starts. The thunder is rolling and it is raining. I am on the road but a long way from any civilised part of Skyrim. I get into a wood, the sight gets even worse. I am conscious I would not see any danger approaching. Due to the rain and thunder chances are that I wouldn't even hear it. I am getting uncomfortable. In that moment something moves and jumps in my way. I get scared to death. Then the rabbit crosses the road and vanishes between two rocks on the other side of the road.
The music would have taken some of the immersion I felt when playing this. Even though it is really great, for me it is a reminder that I play a game (I know I do, but it is nice in situations like this to forget that for a moment and just "live" the character). I can not totally lose myself with it turned on.
This sounds absolutely amazing.
Inspired by this thread, I've been playing without music for the last couple of days. I had no idea how big a difference it would make! Everything feels so much more real now. This morning I was wandering up in the mountains, watchful for any creatures that I might encounter around the corner - frost wolves, the such. I certainly wasn't expecting a dragon... It was cloudy so I didn't even see its shadow, the first thing I noticed was a fire breath right in my face. I've never been so frightened in Skyrim before.
Another day, the exit of a cave I'd just cleared led me to a ledge high above the road. It was middle of the night, the moons were up and I was standing there in complete silence, almost feeling the crisp, cold air on my face.
I don't think I'll ever turn the music on.