Here's some research from the University of Utah,
I'm just going to post the intro. Follow the link for the rest.
"The use of cellular phones has skyrocketed in recent years, with more than 117 million subscribers in the United States as of July 1, 2001. This increase has been accompanied by an increase in the number of individuals concurrently driving and talking on the cell phone. Recent estimates suggest that cell phone users spend 60% of their cell phone time while driving. The precise effects of cell phone use on public safety are unknown; however, because of the possible increase in risks associated with the use of cell phones while driving, several legislative efforts have been made to restrict cell phone use on the road. In most cases, the legislation regarding cell phones and driving makes the tacit assumption that the source of any interference from cell phone use is due to peripheral factors such as dialing and holding the phone while conversing. Among other things, our research evaluates the validity of this assumption.
Prior research has established that the manual manipulation of equipment (e.g., dialing the phone, answering the phone, etc.) has a negative impact on driving. However, the effects of the phone conversation on driving are not as well understood, despite the fact that the duration of a typical phone conversation may be up to two orders of magnitude greater than the time required to dial or answer the phone. One study found that simple conversations did not adversely affect the ability to maintain road position. On the other hand, studies have found that working memory tasks, mental arithmetic tasks, and reasoning tasks disrupt simulated driving performance.
Our research focused on the cell phone conversation, because it comprises the bulk of the time engaged in this dual-task pairing. We sought to determine the extent to which cell phone conversations interfere with driving and, if so, the precise nature of the interference. In particular, the "peripheral interferences" hypothesis attributes interference from cell phones to peripheral factors such as holding the phone while conversing. By contrast, the "attentional hypothesis" attributes interference to the diversion of attention from driving to the phone conversation itself. The study described here is part of a larger research project that will be detailed in a forthcoming issue of Psychological Science."
http://www.nsc.org/library/shelf/inincell.htm
