It depends on game genre. RPG's, shooters, strategy games should have their on music, which suits the game atmosphere. But racing games, sport games can have normal songs with vocal, etc. Have you played Tony Hawk's Pro Skater series? Music is great there and suits the game well. But for me best "non game" music was in Ed Hunter. The game was an awful shooter similar to Virtua Cop or The House Of The Dead, but there were 20 best Iron Maiden songs. Yeah :D

I don't know abouth you but i really like music from Star Wars: Republic commando!! :max:

i like the midis in games like discworld

in general, i found midi music to be too limited in a way. but most important for a game
is, that its music suits its atmosphere, so i don't care much if it's midi or mp3, as long
as the soundtrack's original.

it goes without mentioning, that popular music, such as the stuff being played on MTV
and the like is rather odd being used for a game.
i mean, game music's a type of its own (except you have a game which is related to
some popular content, like triton's example with "KISS"...). i admid, nowadays, there
are games containing scores that can't be easily told apart from movie music (i'm
thinking of "MORROWIND"), but still i think, game score should be distinguished from
'ordinary' pop stuff...

i prefer games to have a score resembling movie's music rather than the rock/pop
types - that's for sure!

The Silent Hill music is awesome, my favorite. They play spft instrumental music, really classy but they put a mellancolic feeling it really catches the scene and they never get boring. And the SH 3 soundtrack is one of my favorite albums, they are REALLY melancolic but on a nice way. Perfect for a lonely night with your girlfriend.