The Toa Mata Band is a collection of Lego Bionicles that play various musical instruments. They play drums, synths, glockenspiels and more!
The nature of Arduino allows it to read many sensors, and control many components simultaneously. It can be used in many musical projects, not generally as the sound creator (although it can-ish), but as a controller. Many excellent new interfaces and performances can be made when the project maker decides they want to build a custom controller.
The Arduinome is an open-source clone of the Monome with easy to obtain parts. The result is similar to the Monome, but with RGB LEDs.