A long long time ago I experimented with this... I will check up on my old files and get back to you but the things I learned :
I was making / mixing at the same time, messing around with the highpass / lowpass filters, volume etc while going along - but of course much automation is possible with variation on when loops happen etc, modplug is great for that.
Playing with filters live was also awesome, so yeah I really recommend this. Obviously you can plug a mic in and play that through your speakers too, but I admit I didnt mess with that at the time, as I was really just experimenting.
The files tended to be looped and somewhat repetative