No yes No Yes, both (see below) Yes, there are several applications to choose from. The technical merits of plugins and applications used in Ubuntu studio generally are comparable -- many plugins are developed by extremely brilliant researchers or geeks using it as a diversion to the normal day job...on the other hand, most applications are maintained until it serves the purposes of the creator. This usually means the algorithms and processing are solid, but the user interface may not be designed to be friendly to a user who isn't educated in a technical field of study.
I don't think many will argue there are better applications developed for Linux with good commercial support like Windows has. As said above some people manage to get some of these to work on Linux. My own personal needs are met by what is natively available for linux.
I think the most important point that comes out above is, all the tools necessary for recording, processing and mastering music are natively available on linux. If you try it and fail the first few attempts, don't give up quickly. You have to learn some basic important concepts regarding jack and the real time audio system and program inter-connections before you will even hear sound coming out. I think some of the differences turn people off because it means they have to learn a different way of doing things...this can be discouraging after having spend the past several years getting familiar with the way things are done on Windows machines.
Some people have a hardware setup that either requires special configuration, or simply is not supported out of the box. This can cause many head-aches.
The biggest reason I use linux for pretty much everything boils down to this:
A) Freedom
B) Flexibility
C) Low cost
Some professional studios are using Linux for those reasons. Basically, the tools available are able to produce the same outcome as a Windows-based studio system, but you pay for the functions in the form of time spent learning and getting your system configured properly, where with commercial applications you pay for a system that works out of the box with little effort on the user's part.
I think many of the complaints are related to appearance and work flow. People who are serious about producing recorded music may determine the "lack of creative inspiration" from the GUI and work flow is more than compensated by the amount of money they don't pay for that kind of interface. Most determine the polish of Windows or Mac-based tools are worth the money.
Many of the digital signal processing tools meet or exceed what is available on Windows. The catch is you often need to have some understanding of what the DSP plugins do internally in order to understand the interface.
A major advantage is the freedom. You don't have to type in a long 18-digit activation code, or pay extra for a more fully-featured license, you don't get marketing garbage from the company who sells your plugins, you don't have to go through a frustrating routine with all companies from whom you bought plugins if your computer crashes and you had misplaced your original installation box with product key--you really get to bypass the trouble of having a lot of little strings tied to your testicles by using free open source software. And you can interconnect everything using jack.
The good thing is you can try Ubuntu Studio without installing it. Just pop in the CD and boot from it when you start up your computer. This is particularly great if your hardware just happens to be supported by default
Another good live CD is GNUguitarINUX. It is designed specifically for people who don't want to install Linux permanently. You burn it to a CD or flash it to a USB stick and boot off that media. It includes Rakarrack, Guitarix, SooperLooper and some other basic tools that are great for live performance and "scratch pad" recording:
http://gnuguitarinux.sourceforge.net/
http://www.linuxmusicians.com/viewtopic.php?f=24&t=2654
It is still beta, but it is based on Debian Squeeze, so I imagine any hardware supported by the Linux kernel will work as well as it will work on any other linux system. It works fine for my setup when I have tested it.
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