Use an Earbud Clip$15 at the Apple Store, though you can find it for far cheaper if you dig around the web ( $4 on Amazon, for example).
Alternately, a company called PKOH NYC used to make an Earbud Clip of its own that made easy work out of wrapping and unwrapping your headphones from your media player, but the product has long since been discontinued. If this is more to your liking, you can try your luck on Ebay and Craigslist.
The Figure 8 Methodhere, and if you get stuck amid the 4-step process, you probably shouldn't be handling headphones to begin with.
The Rockstar MethodWe didn't invent this method, we just came up with the name. Why? Watch this awesome 53-second video clip with music by Europe (The Final Countdown) and let us know if you can think of a better name.
How to Knot Tie Your CablesThe Figure 8 method isn't the only way to knot your cables so they don't become kinked, there are plenty of other techniques. Some of these involve wrapping the cord around your fingers before neatly tying them in place around the middle, while others, such as the MP3 knot, involve wrapping and securing the cable directly to your media player. Have about two and a half minutes to spare? Then check out these three quick video clips:
The Hanger and Clothespin MethodA hanger and clothespin don't just come in handy for doing laundry, they can also be used to straighten out coiled cords, even ones that may appear permanently kinked. All you have to do is put them on an hanger in your closet with the earbuds facing downwards. This alone isn't likely to do the trick, so to give the cord(s) more weight, attach a couple of clothespins at the bottom and let it all hang for a night. When you wake up in the morning, the cord should be straight as an arrow.
Avoid Fraying Your Cables
How do you keep your headphone cords tidy? Do you even bother managing your cables?