I have had a few hours now with a new set of Headphones from Acoustic Research.  
 
The AR-H500 series is an Active Noise Cancellation headphone.
 
I have been playing with headphones lately looking for a Best Buy product.
 
I wanted to stay cheap (since these were going to be used and left at work).
 
I looked and listened to MANY sets in the less than $100.00 range.
 
This system is on sale all over the web for ~25.00 - 31.00 delivered.
 
Now my findings:
 
I first tried the cancellation capabilities..  My daughters room has a white noise machine to help her sleep.  It has several different settings, like the train, ocean, rain...
 
Each of the settings were easily muted using the headphones fully unattached from any audio source.  The ability to cancel this noise was very very good.  I in fact, was quite impressed.  Nearly all sources were nearly removed completely with only the louder noises finding their way through..  In fact I would have to say these were nearly as good at removing ambient noise as the Bose QC-2.
 
At this price I was worried about the sound quality..  Good noise cancellation is useless if your music now sounds like #$%@.
 
Sound quality (playing back MP3s via the PC and Winamp) was not stellar out of the box.
 
however using the included EQ the headphones were easily tuned and sound very good.  The 40MM Drivers (not 30mm as some sites have stated) reproduce a good deep base while the highs are very crisp.  It took some tweaking to bring out the midrange but it is there.  Not as vibrant as the QC2s but not bad.
 
These also ship with a travel case (they fold pretty flat) and the dual adapter for in flight systems.  They also come with 2 AAA batteries.  1 battery per ear cup.
 
These are an OVER the ear headphone that are quite comfortable for long usage.  These actually have a better look than the other pics.
 
One con...  The wire is NOT too long and it has one wire per ear cup... Other headphones only have a single wire which is nice.
 
One major pro:  A buddy of mine recently purchased a cheaper pair of active noise cancellation headphones and the cord had an inline sampler/volume control.  This set has both Sampler and Volume fully contained within the ear cups which are still very very light weight.
 
Link to pics/info/purchase
 
Hope this helps someone looking for an inexpensive noise cancellation headset.

If anyone has experience with these or any other  inexpensive noise canceling headphones please feel free to comment/add.

I have used inexpensive headphone before and it worked great with noise canceling, but not so good with sound quality. You need to up that budget a little and find a bit more good sound quality/ noise canceling headphone.

Chuck,
 
Have you tried the AR-H500s?
 
They really are not bad.  Especially for the price.

UPDATE::
 
I had a chance to listen to these again today while at work.  I have a steady hum from the Heating and AC vents near my desk (actually they are loud just about anywhere in the building).  Without ANY audio input the AR-H500s were able to remove nearly ALL the noise.  The difference between the ON and OFF position is incredible.  Others verified/validated my findings as well.
 
I wanted to also test with a standalone device such as an IPOD so that I could verify that the headphones were NOT flat without extensive tweaking of the EQ.  Testing with an iPOD Nano they sounded very very good.  In fact they were not flat at all.  The mids were acurate and the highs were too.  The lows were good but NOT great.  The were by no means great but were very acceptable.
 
Now this got me thinking...  I had to do massive reconfig of my Winamp EQ to make these sound very good.  Why? (well duh)...  I forgot that I had configured Winamp for my external speakers at work which are TOO BRIGHT and TOO BASE heavy..  A Labtech SUB/Sat system.
 
So in effect I defeated the headset right out of the box because I had the EQ miss configured for a bigger system with a much different capability.
 
The Nano helped me confirm this as I turned the EQ OFF.  The headphones were very good at sound reproduction with the active cancellation on.
 
So far I am very happy with them.. Especially since I can throw them into my Notebook case and not worry because of the hard shell travel case they come in.
 
So Far A+ and many others who tried them agree.

No I haven't tried that headphone nor read a review about it. But from my experience, inexpensive headphones with noise canceling feature usually don't have a good quality sound since half the money is on that noise canceling thing. At least for the ones I got, I had used 2 of them I think for travel.