Blip Festival 2008 is currently going on in Brooklyn. From the website:
Highlighting the chipmusic phenomenon and its related disciplines, the festival aims to showcase emerging creative niches involving the use of legacy video game & home computer hardware as modern artistic instrumentation. Devices such as the Nintendo Entertainment System, Commodore 64, Atari ST, Nintendo Game Boy and others are repurposed into the service of original, low-res, high-impact electronic music and visuals — sidestepping game culture and instead exploring the technology’s untapped potential and distinctive intrinsic character.
Their Myspace page has selections of some of the music. And Weekend America had interviews with some of the musicians. Interestingly, a couple of the musicians talk about the raw and “dirty” quality they can get using the old videogame systems — a rawness that, you have to figure, derives more from a sense of aural nostalgia than from any analog ghosts in their digital machines.