I have to say that for me, it is both entertaining and distracting, and both are at different levels depending on the situation. Then in more situations, it's not distracting at all because i force myself to ignore it. so i have several answers to this question.
For the most part I believe that I find music far more entertaining and enriching than distracting. Most times of the day this is how I feel about it. It can even encourage me to work harder. An example would be, I like to listen to music while I'm writing because it makes me day dream about what I'm writing about to give me ideas. So technically it is a distraction aimed in the right direction and therefore productive. Or if i'm physically working and I'm listening to music I like, it sometimes gets me pumped up to move faster.
Now as for the distraction part, this usually comes into play when I'm doing something that requires more mental work. Most of the time, if I really have to think about things, then music can be super distracting for me, the same way it is for you. It just makes me daydream, or i start thinking about the lyrics or whatever, and suddenly I've lost my train of thought for what I was just doing.
However, if the volume for the music is decently low, most times I can make myself ignore the music in the background so that it does not distract me when I need to focus, and I can listen to it when I have a free moment, and others can listen to it as they please. So again, I'm back to the, for the most part, I believe it enriching and entertaining, not distracting. At least for me. It's only when it gets too loud that it gets very disruptive for me.