Back in the sci-fi/fantasy world, Terry Pratchett's Soul Music was very amusing. I read it when my best friend was in Celtic rock band Tempest, so "music with rocks in" really spoke to me. Gael Baudino's Gossamer Axe (at least I think it was hers) was amusing for similar but not identical reasons.

One of my favorites in the genre is Greg Bear's The Infinity Concerto, which is entirely dependent on a piece of music. And come to think of it, my all-time favorite novel Lud-in-the-Mist, by Hope Mirrlees, has many ongoing musical themes and a phemonenon called "the Note" that, when the protagonist hears it, sends him into a near-dissociative state that shakes his faith in the solidity of his middle-class, burgher-like existence as mayor of Lud, and has him suspecting the reality of perilous--and consistently denied--faerie.   

I'm sitting in a house that R.A. MacAvoy (who is a friend) and her husband built. We bought it from them when they left our intentional community so he could work for "the dark side" in Redmond, Washington. One of the characters in her Twisting the Rope (which I read before I knew her) was closely based on another dear old friend, which completely surprised me when I read it.

And speaking of friends, one of Marion Zimmer Bradley's Darkover books -- sorry, I forget which one; it's been years -- has a scene that features a trio directly based on Dave Swan's Oak, Ash and Thorn in (as I recall) its pre-Swan iteration. You can tell because they are singing "Aldones Bless the Human Elbow" -- also because the physical descriptions are picture-perfect.

Cheers,
Claire