I've been pretty happy with the passive, in ear canal style of headphones for a while now. They're definitely not perfect, but I do find they do a pretty reasonable job of muting the cabin environment. Regular ear buds aren't going to work for it, they need to be the type that seal into your ear canal. But I also really dislike the big over the ear headphones, they've always felt hot and uncomfortable for me.

Personally, I can't really sleep well with either style myself, but I also don't sleep well on a plane to begin with.

Unfortunately, on my last flight I discovered that the headphones I've been using have ceased functioning, so now I need to find another pair. Unfortunately, I don't think the Sony EX71's I had are made anymore, so I'll have to find something different (I'm not really looking at spending Ety prices myself).