I use all sorts of pedals, ranging from Look, Shimano SPD, plastic based straps and metal based straps to flats. In city traffic I'd probably stick to flats or straps. In suburbian commutes with less stop and go, I found SPDs to be a good compromise since they are pretty easy to get out of (my falls have been when I was using look pedals on a pretty stiff setting).
In the end you go with whatever you're comfortable with. There's really no objective better or worse, just tradeoffs that each of us make (safer but slower, etc)
(There's no compromising when it comes to front and rear lights though, imo)
Yes, the frustrating thing about the bike helmet debate is that it totally misrepresents the kind of safety gear that's important.
I never wear a helmet, but I ALWAYS have reflectors, front and rear lights, a hat to keep the sun out of my eyes, rear fenders, and mirrors to check for traffic behind me.
Visibility and awareness are infinitely more important than helmets.
I always commute with flat pedals because it's easier and more convenient, but the safety issue has got to be huge.