Hi Sandman,
Don't forget that there's a difference between audio signals and midi-signals. there to completely different things. Most sequenser do support audio, but the approach is completely different than midi sequensing itself.
But today it is possible to transform audio signals like a guitar to midi signals. There are complete midi-guitars (parker has one), but you can also put a special device next to your pick-ups to transform it to midi. The problems are off course: quite expensive, and also in the lower frequenties you can have phase problems...
greetings!
Brett