Breakaway is a utility that will pause/resume iTunes for you whenever you unplung and/or plug in your headphones.

You can now walk away from your computer for a moment without missing a beat of your favorite song, or disturbing anyone with your speakers coming on.

Optionally, you can enable mute button functionality, which makes your mute button act as a pause for iTunes. Need to take a call? Hit mute on your keyboard and talk all you need. As soon as you unmute, iTunes will resume once more.

Note: If you want to use Breakaway solely for mute button functionality, be sure to disable "Headphones mode"

Also, Breakaway now supports Growl notifications, so you can get the status of your jack without the trouble of using a menu item.