Recording used to be accomplished by putting a group of musician into a recording studio, microphoning each player, separating them as space allowed and recording....basically a live performance. As multi-track recording gained ground in the 60's, (4 & 8 track recorders) engineers were able to record individual parts separately, allowing more control over individual instruments. During the 70's & 80's multi-track machines with 32 tracks, and 64 tracks became the norm in all major studios. However, it was still real musicians performing real instruments.
As digital recording on computers started to take hold in the 90's through today, it has revolutionized recording and given engineers the ability to "sculpt" sounds and performances to an unprecedented degree.
At Digital Pursuit Studio, we use a combination of musicians performing real instruments and virtual instruments. The virtual instrument technology has become so sophisticated that it's nearly impossible to detect what's real and what's virtual. When recording virtual instruments, my goal is always to make the virtual instruments sound as authentic as possible. Keyboards are typically very easy to make sound real. Other instruments such as horns, guitars, strings and even drums, in the past, have been very difficult and even impossible to make sound "real". That is no longer the case. Software technology along with sampling and modeling has almost entirely eliminated the mechanical and synthetic sounding instruments. You can listen to some examples to hear for yourself what can be accomplished with the right technology, skill, and experience to make virtual instruments indistinguishable from musicians playing real instruments.