Eureka! I have found the issue!
While talking with AppleCare just now I was able to recreate the issue and workarounds to stop it. Here's what I learned:
1. iPad and BlueTooth keyboard need to be on. iPad in sleep mode versus fully off.
2. Pressing the F8 key turns on your music whether your iPad music icon says Music or iPod which depens if you're on iOS 4 or 5 (at the time of this writing).
3. So if your iPad and keyboard are in say... your knapsak, briefcase, etc. and your F8 key gets pressed accidentally, your music will start playing (if your ipad is sleeping and your keyboard is on).
4. If you have YouTube on & in sleep mode, I noticed that YouTube will start versus iPod/Music.
5. If your iPod/Music app was off/quit when your F8 key got pressed and started your iPod/Music playing a song, if you double click the iPad Home button you will be surprised to see that the iPod/Music app icon is NOT showing in the one inch area at the bottom of your iPad where all your "on" apps show.
6. So how is your music playing if the music app doesn't show presuming it isn't "on"? It turns out iPod/Music is always in like a "ready" mode. Double click the iPad Home button. When the bottom app area appears, swipe from left to right in the app area and you will now see your music app controls to start/stop, etc.
7. So.. this F8 key deal, is not a bug, but per AppleCare the way BlueTooth keyboards are designed. But to my mind there SHOULD be a preference to disable the F8 key so your music doesn't start playing in a quiet lecture class or biz meeting should you have left your iPad in sleep mode and your keyboard on.
8. Workaround 1: Turn your keyboard off before putting in a case along with your iPad. Hold on/off key on right for a few seconds till tiny green light goes off in upper right above the CD eject key. If your keyboard is off, F8 won't work and can't turn on your iPad's music.
9. Workaround 2: if your keyboard is on and the F8 key starts playing your iPad music or YouTube, get to your keyboard and press F8 to stop it, or F10 to mute the sound.
10. Workaround 3: open your ipad, double click the home button to show your apps, swipe left to right in lower app area, when your music controls appear, press Stop.
11. Write Apple and request that they give us a preference to disable the F8 key in:
iPad > Settings > General > Keyboard... in an upcoming iOS.
How To Write Apple:
Go to <apple.com> and in the lower right of most pages, even the homepage, is the link "Contact Us" - click it. On the lower right of the next page is a box of links "Website Feedback" - click "Product Feedback". On the next page you'll see lots of icons for various Apple products but there isn't a keyboard one, so click the iPad and fill out the form page with your observation and request for F8 bluetooth keyboard disable capability. It would be nice to know what all the other macros associated with the F keys are and do as we may want to be able to disable or edit them in some way.
Mystery solved. BTW... if there already is a way to control the F keys on a BlueTooth keyboard as related to your iPad, please advise in this thread.
Thanks.
Steven