A new study that was published a few days ago gives scientific explanation about dangers of talking and driving and reports that this habit may be even more dangerous than drinking and driving.
Forty volunteers participated in the study and drove the car on four different mornings: once while legally intoxicated with a blood alcohol level of .08 , once while talking on a hands-free cell phone, once while talking on a hand-held cell phone, and once with no distractions.
Researchers used a simulator, which is a virtual reality driving machine. Their task was to follow a pace car. The machine measured how fast, accurately and aggressively the driver follows the route while an eye tracking device measured where the drivers looked the whole time.

At the end of the study, researchers found that cell phone drivers took longer time to hit the brakes and got in more accidents than drunk drivers. However, both types’ driving abilities were impaired.
The reason why phone drivers were more distracted was due to the phenomenon "inattention blindness” as the researchers had called it. A person who is driving is not really dealing with the physical environment that you're in. Although they are looking at the window shield, they are not necessarily seeing what's out there because their mind is elsewhere. When they compared results from four different driving situations, they found out that drivers who talked on phones remembered half as many of the objects they saw than those who were driving without talking on phones.
The biggest problem is that the drivers did not even realize that they weren't really "seeing" everything and thought they were driving perfectly safe.