"It seems paradoxical but the more people ride bicycles on our city streets, the less likely they are to be injured in traffic accidents." See : A Virtuous Cycle: Safety In Numbers For Bicycle Riders, Science Daily, Sept 2008
Cycling is safer in Australian states where more people cycle. The graph below (from a peer-reviewed article published in the Health Promotion Journal of Australia) uses Australian data to illustrate the phenomenon. There have been few comprehensive surveys of cycle use - the data shown below are for 1985-86 - but they clearly show that States with the highest cycle use have the lowest fatality rates per 100 km.
Conversely, the decrease in cycling caused by the introduction of helmet laws (see graphs below of census data on percentages cycling to work from 1976-2006) resulted in increased injury rates per cyclist - more information, including detailed statistics.
Cycling is safer in countries where more people cycle. Just as Australian States with the most cycling are the safest, international comparisons show that countries with most cycling are also the safest, See: More and Safer Cycling (UK CTC - 2 meg powerpoint show, press Esc to exit)
Safe cycling: the safest country for cyclists is Holland. Typical safe riding practices are shown in the pictures below and at the Amsterdam Bicycles website which shows 82 pictures of bicycles taken in a 73 minute period on 9/12/06 at one corner of Nieuw Markt (a nice open square in Amsterdam).
. More pictures of Dutch cyclists - click to enlarge