SGDK, the Sega Megadrive/Genesis Development Kit, has reached version 1.00. With it comes an exiting new music driver called XGM. It supports 4 channels of PCM playback at 14 KHz along with the usual 5x FM, 4x PSG channels. Programmers will also be happy to know that it runs entirely on the Z80, leaving the 68000 free for game/demo logic.
SGDK comes with a utility called xmgtool, which can be used to convert .vgm files to the format required by the XGM driver.
A test rom with various sound examples can be found here. More info is available on the SGDK project page.