In the 3D computer-generated video Pipe Dream, a number of virtual musical instruments are shown playing a complicated piece of music, with notes triggered by projectiles (ping-pong balls bouncing off xylophones, for instance). This would make a very neat xscreensaver hack that could play music on virtual instruments from a directory of MIDI files.
It would be possible to clone Pipe Dream (perhaps with rather less "polish"), but simpler animations would also be effective: just an animated piano keyboard, for instance.
For a UKC assessment, I produced a Perl script to generate SMIL animations of musical instruments; this turned out to be fairly straightforward once I'd figured out how to convert MIDI timing information into absolute times. The xscreensaver animation would be the difficult part. It's also not terribly obvious that you'd want a screensaver to make noise (although it would still look pretty even if you couldn't actually hear the music).