While i work, I listen to music using headphones plugged into the headphone jack on my MBP. Sometimes the music is streamed via iTunes radio, but usually mp3 files played through iTunes.
Obviously, to eliminate sound from other sources, you have to do more than just press the 'mute' button. The two annoying sources are: (i) sound effects from Mac OSX; and (ii) from websites (either music or ridiculous sound effects like the sound of a camera shutter when you click a link--stuff like that.
The first type is easy enough to deal with: System Prefs > Sound > Sound Effects : then uncheck "play user interface sound effects" and just for good measure move the slider above this checkbox all the way to the left. (The Sound Effects Volume slider is separate from the Output Volume slider, though both are on the same panel).
It's the second source that i don't know how to get rid of. I thought that surely there's got to be a small shareware app out there from an indy mac developer (for which i'd gladly pay $10-$15), or a browser plug-in for Safari--but no luck.