I was in Edinburgh two weeks ago but with bad timing to hear music in pubs that weepiper suggested. I noted that there is a pub on the Royal Mile just a ways past Bank Street walking towards Holyrood that claims to have Folk Music every Monday Night. I inquired in a music shop about good places to hear live traditional music and was told alas there are none but several places that put on bad shows for tourists.
My trip to Scotland was wonderful with lots of time spent in the the green rainy countryside and wonderful evenings with twighlight lasting until late at night. All the music I heard was bad 70s american pop or country western. I did pick up some good CDs of traditional music in Edinburgh, that I'm listening to while commuting. The people in Scotland were very friendly and the coasts and castles and roads winding through the green hills won't be soon forgotten.