As a couple of people have said, it is illegal in NY to talk on a cell phone while driving unless you have a hands-free device. There is an exception if you are calling 911. Some lawmakers are trying to pass a similar law in CT, which I think is a great idea.
The NY law is routinely ignored. All the time, I see people with a hand-held cell phone in one hand and a cup of coffee in the other, trying to steer with their wrists or knees or whatever.
I do sometimes talk on my cell while driving, but always with either the hands-free unit installed in my car or with my earpiece. To me it's no more distracting than talking to someone else in the car. If I need to dial, I will pull over or ask a passenger to dial.
BTW, I didn't see if the person who hit me was using her cell phone, but I did see her holding a cigarette in one hand, which was nowhere near the steering wheel.