Heart disease kills many more Americans than pollution. Even after factoring in the additional pollution exposure and traffic accident risk, cycling is still a net win:
Interesting study. Just as a slight criticism of your wording, although I don't think this applies to the study- a lot of deaths from heart disease are actually caused by air pollution. Inhalation of particulate matter is implicated in tens of thousands of deaths a year.
Even though exercise outweighs inhalation of fumes, air pollution is a serious issue, and many lives could be saved by its reduction. Hopefully that will be an extra benefit of electric and hybrid cars in cities.
http://www.ncbi.nlm.nih.gov/pmc/articles/PMC2920084/
(And, of course, the more people cycling, the more drivers look out for cyclists. And there are less cars!)