Can anyone tell me whether this track is in 3/4 time or 2/4 time? I can hear both....
PS it's mastered LOUD so you may want to adjust levels 
 

Based on the first 1:30 minutes or so, it's both, which is why you can hear both.  The percussion is 2/4 and pretty much everything else sounds like it is 3/4.

Yeah I guess that's what's making me hear both....the kick is playing in 2/4 and the melodic elements are phrased in 3/4. I have these confusions when trying work out what time sig my own music is in all the time. 

To me it's 4/4. 
 
The pads are playing a pattern built mainly around dotted quarter notes.  What I hear would be written as:  dotted quarter, dotted quarter, half (or two tied quarters since it spans a measure), quarter, etc. :
 

 
 

I would say 6/4.  All the phrases seem to repeat on a 6-beat cycle.
 

If I was playing drums to this I could count it as 3 measures of 4/4 as illustrated by vanblah.
 
But more than likely, I would count it in 6/4 to make it easy on myself.  Look at the rhythm of the top line in vanblah's post ... It may not look like it on paper but the rhythm repeats itself after 6 beats (i.e., the tied 1/8th note and 1/4 note have the same value as the dotted quarter and the tied 1/4 notes have the same value as the 1/2 note).
 
 

Similar to Kashmir.
 http://www.youtube.com/watch?v=sfR_HWMzgyc
 

I must admit I'm having difficulty hearing anything other than 6/4 now. Although the kick has a strong 2/4 feel to my ears. I like this artist a lot, he's always playing with my head rhythm wise. Try this one for size, there's a neat poly-rhythm if you start it at 2:40. 
 

And while we're on the subject, here's another one I can't wrap my head around. I really love the sound of it, but every time I try and work out what's going on meter wise, my brain stops working. 
 

 
Another one which has always baffled me is Pyramid Song by Radiohead. A very beautiful composition, but I can never suss the rhythm. 

Wrt the 2/4 ... yes, I get that when you have a single kick and a single snare hit BUT ...
 
Counting in 2/4 is cumbersome and makes it difficult to keep track of where you are wrt the melody and I very rarely count in 2/4 (when I need to count).  In addition to keeping time, it is kinda' a drummers responsibility to musically indicate the end of one phrase and the start of another (e.g., the crash cymbal on beat 1 one of the chorus).
 
If I need to count because a piece is unfamiliar, I will find a time signature scheme that leaves me in the right place at the right time. 
 
Also, notation, time signature and what you do in your head may differ ... and what 2 musicians count when playing the same piece may differ.