how can I acknowledge what is happening around me?

[Mashell]

If I'm aware of thimgs going on around me, how can I be focused on the breath?

[James the Giant]

Try it.
Walk around for 5 minutes, staying with the breath.
You'll be focussed on the breath, but aware of other things.
Your experience will answer your question.

[convivium]

if use your breath as an anchor it can help keep you from distractions in what your doing in daily life. you probably shouldn't put more of your attn on your breath then the task in front of you. when you're alone and have nothing to do, instead of procrastinating or getting distracted with unnecessary things, then you can give all your attention to the breath. don't try to be a saint or something when your with others; be with them. don't try to abstract from what your doing; do it. but don't think you can just merge meditation in everything to the exclusion of silent sitting. that's how it works best for me. when you do more sitting or walking meditation on the breath, after a while you will never not be aware of the breath.