Orchestration

Sonic games don't use midi files, they rely on instruments (often called "voices") for the YM2612 (YM = Yamaha), which is the FM synthetizer included in the Genesis. It can replay 6 melodic channels at the same time (or 5 melodic channels and a DAC track, used for drums), and each of them can use a different FM instrument. There are several libraries of instruments available on the internet, and some tools (like Sonic QX) can even convert Yamaha System Exclusive banks (.syx) to a format usable by the sound engine used in Sonic (which is called SMPS). One of the most used libraries is the Universal Voice Bank, included in Sonic 3 & Knuckles, which contains $22 (34) commonly used voices, except that they mostly suck :P
Additionally, you have a square wave generator, which is able to output 3 melodic channels and a noise channel, although it's limited to 2+1 or 3+0 by the SMPS driver.

This means that your orchestration shouldn't use more than 9 channels, including one for drums, and 2 or 3 that are square waves.

I hope this is a general overview about what you were looking for

Oh yes I almost forgot, each of those channel is monophonic, which means that chords have to be split.

edit: grammar and wikilinks

 

So much for ensemble harmony...

 

You'd be surprised at what harmony that you can churn out of that little chip, actually. The concept of splitting notes across multiple channels to create chords is nothing new, for sure—just imagine that each channel is an individual instrument in an orchestra, and it becomes much more of a plausible concept.