Best Amiga for music production? (new to Amiga)

[itix]

AGA allows 256 colours on screen at once but Amiga 1200 is less compatible than previous generations. On the other hand Amiga 1200 is easy to expand with a harddisk and an accelerator board/ram expansion and therefore better buy than Amiga 500.

[itix]

So with the 1200 would there just be compatibility issues with graphic oriented programs such as games, or would that also affect my choices for sound software?

There will be problems with games and productivity software. Many games can be patched using WHDLoad but you have to own the original copy.

What sound software you are going to run? Newer software run just fine (from 1995 and newer) but if you prefer using sound editors from soundtracker era (late 80s and early 90s) then you have issues.

Nevertheless I still recommend getting Amiga 1200. If you run into compatibility issues you can try to find replacement software or run downgrader utilities.