Most recent module playing libraries that I'm familiar with tend to support "all" of the popular formats (MOD, XM, IT, S3M, pretty much). It's something that could be integrated into my new patch as a file format without too much bother, but it's not something I have planned at present. I agree that modules would be a fairly decent trade-off between file size and quality compared to MIDI vs MP3/Vorbis, although they are somewhat more complex to build, of course, and do have various limitations.
Please don't forget the fact that you have to own the right of the samples you're using. So while in theory it will sound much better, in practice you are still severely limited to the copyright free samples you can find. I have invested about 3000 euros of samples that i can use in mp3 but not in MOD because that's against their terms of usage.
- You can't use commercial sample libraries, severely limiting the sound pallette you can use
- Many mod files are small in size because they use low sample rates (< 22 khz) and very short loops.
- Another way MODS are kept small is by using the same sample for many different pitches and velocities
- You can't make them in normal midi and audio sequencer software like midi files and regular audio tracks
- It's nothing like produced mp3 or wav music because you can't use (high quality) dsp effects
- There has been a ruling about MIDI files being protected by copyright the same way as normal audio files, can't find anything about MOD
- Afaik, midi has a much better resolution (timewise) than MOD, at least than when i used to make mods a long time ago. So try making a snare drum roll like the one used in the intro of the original Transport Tycoon intro