One really funny and cool aspect of Terraria's 1.1 update was that they added bells and harps and you could play different pitched notes depending how far away the curser was from the middle of the screen. In multiplayer I could entertain people by playing (bad sounding xD) novelty songs! Maybe this idea could be expanded upon, with drums, guitar, maybe even a cool interface. Think of the youtube possibilities of people playing cool songs on starbound instruments!
While I agree this would be a cool feature, i think it is more of a POST release suggestion. Making music certainly isn't the first thing I would like to do. I remember in Lord of the rings online, we would get together and form impromptu bands.... and that was good times.
I highly support. Even though it may not serve purpose (Although im sure you could incorporate playing music into a quest) i would thoroughly enjoy having musical instruments. They could add another level of customization to our characters and serve as a "money dump" too. I know i would like to customize an instrument to look much more complex than everyone else's.
I can imagine the music being used to soothe the savage beasts in a way that makes hostile mobs stop attacking you.
wut? btw, nice work bro! your suggestion made it into the game! (whether it was your idea that inspired the devs or not lol)