How can I know that I am clear of thoughts while I am meditating?

The longer my answer, the more it would make you think while mediating, so:

Imagine yourself as someone else, who is thinking of you (you as this other person thinking of / imagining what this another person - you - is doing at that moment).

Another way I would like to share:

when you still can't for a period of time, let it pass. Try it again next time.

It's ok.

(The rest of the answers are rather comprehensive. My answer compliments them with some additional information. )

Your mind's reaction to some sensation is the main cause of your mind wandering away from the meditation object. (Sensations is also the mind conditioner. ) So through Vipassana Meditation it would be beneficial to develop Piti and Passadhi. This will help you stay with the meditation object for a long time.

When you get distracted 2 things are present.

1. Some contact or sensation is what took your attention away (e.g. a sound)
2. You experience a mental reaction to the sensation by how you perceive the experience
3. The sensations are compounded my other associated mental formations (memories, emotions, etc.) that arise (stories behind the sound)

But when you realize and bring your attention to the sensations they dissappear leaving you in Piti, Suka, Passadhi state. As you do this the arising of distractions will loose vigor and frequency.

Concentration on certain points like the upper lip. Upper palate generally tend to create more Piti. (Though not Buddhist concepts concentration on points of the Chakra has a similar effect. See Achan Lee, Thanisaro Bikkhu's manuals also.)

Also be aware of the 5 hindrances. The easiest way to do this is to identify the sensations associated with the hindrances. When the come up look at the sensation until it passes away.

Being aware of ones surroundings during meditation is a passive behaviour, not an active one. My monk friend has instructed me to do so not by trying, as you stated. The world that surrounds us is fresh and being in the moment brings us back to a natural state of mindfulness. Again I stress that this is passive.

He said to me:

Anything that pops into your mind when you meditate, label it as thinking and quietly let it go away.

The type of meditation that this was related to was called placing focus on the breath (not keeping focus on the breath). I found that placing the focus on the breath eventually lead to a quiet state in which I was aware of my surroundings, truly being in the moment where everything was fresh. I did not think about being aware, I just simply was (here I mean I just simply existed). This was the natural return to a natural state of mindfulness. The only active effort that I had to do was to place my focus on my breath repeatedly and peacefully allow any thinking to depart from my mind. After some time I would start thinking again and repeat the process. This is very beginners level meditation.

I realize that this may seem paradoxical or difficult to understand. You may need to experience to fully understand it. I have described what my monk friend instructed me and my experience of it. Yours may be different. I suggest seeking meditation instruction from a monk.

Mindfulness is a way to develop concentration. This would stop the mind from wandering, thinking and developing stories about the objects chosen for the focus of meditation.

Using mindfulness of breathing as a specific example:

Focus attention on the breath. Eventually the mind will start to wander; at this point the mind can start to create a myriad of thoughts. When this happens recognize it (a moment of mindfulness) and return to the focus to breath.

This can take many hours of practice before getting to a level where recognizing that attention has shifted happens immediately. Eventually after getting to this point it can take many more hours to keep attention from shifting at all. These different levels are called mental abidings, in all, there are 9:

1. Placement of the mind occurs when the practitioner is able to place his attention on the object of meditation, but is unable to maintain that attention for very long. Distractions, dullness of mind and other hindrances are common.

2. Continuous attention occurs when the practitioner experiences moments of continuous attention on the object before becoming distracted. According to B Alan Wallace, this is when you can maintain your attention on the meditation object for about a minute.

3. Repeated attention is when the practitioner's attention is fixed on the object for most of the practice session and she or he is able to immediately realize when she or he has lost his mental hold on the object and is able to restore that attention quickly. Sakyong Mipham Rinpoche suggests that being able to maintain attention for 108 breaths is a good benchmark for when we have reached this stage.

4. Close attention occurs when the practitioner is able to maintain his attention throughout the entire meditation session (an hour or more) without losing their mental hold on the meditation object at all. In this stage the practitioner achieves the power of mindfulness. Nevertheless, this stage still contains subtle forms of excitation and dullness or laxity.

5. Tamed attention, by this stage the practitioner achieves deep tranquility of mind, but must be watchful for subtle forms of laxity or dullness, peaceful states of mind which can be confused for calm abiding. By focusing on the future benefits of gaining Shamatha, the practitioner can uplift his mind and become more focused and clear.

6. Pacified attention is the stage during which subtle mental dullness or laxity is no longer a great difficulty, but now the practitioner is prone to subtle excitements which arise at the periphery of meditative attention. According to B. Alan Wallace this stage is achieved only after thousands of hours of rigorous training.

7. Fully pacified attention, although the practitioner may still experience of subtle excitement or dullness, they are rare and he can easily recognize and pacify them.

8. Single-pointed attention in this stage the practitioner can reach high levels of concentration with only a slight effort and without being interrupted even by subtle laxity or excitement during the entire meditation session.

9. Attentional Balance, the meditator now effortlessly reaches absorbed concentration and can maintain it for about four hours without any single interruption.

Using your example of sounds as the object of focus instead of breath:

Focus attention on the sound chosen as the object of focus. Eventually the mind will start to wander (what you described as putting stories behind the sounds). Simply realize this is happening and return your focus back to the object itself.

Silence would be more difficult than breath or a certain sound. Breath and usually sounds have subtle flow while silence is static. Subtle flow can help to keep attention focused because it more closely resemble the mind, which has subtle flow.

The simple instructions combined with the inability for most practitioners to master them instantly can result in the belief that the instructions were wrong or that they are not complex enough. The process just takes patience and perseverance.