I think the real question is what kind of gear did the producers use when thinking about hip-hop in the analog age... And that would be almost strictly hardware samplers - in an age before the Mashine, or whatever. On Illmatic, I know DJ Premier, Pete Rock, and Q-Tip had a lot to do with the production of that album, and all three of them still swear by
the MPC 2000. I don't know where editting/splicing would come into play... the way they would make the song could be changed very easily.
From what I've heard, this album was recorded in a proper professional studio (and since Jay-Z and Nas both had major label deals, I would Jay-Z's was done the same way)... so, back in the day, I would assume the setup was some kind of professional 2" 24 track tape machine (Studer or Otari, or what have you), with a really nice microphone (
Neumann U87 or
C414 for example), and a really nice mic pre, and a really nice compressor (such as a UA LA-2A, or Urei 1176, or something else of that nature)... It was probably pretty standard professional gear that was used in producing that album. Now, if you're talking Wu Tang, who knows what RZA was doing... that sound is so dirty, and he basically recorded that whole first album without the help of major label money, so...