Didn't Musicline Editor do actual realtime synthesis using Paula?
http://www.musicline.org/software.html
Nah, that's software synthesis, made all the more impressive by being able to run well on a basic A1200. IIRC it uses looped wave segments (always powers of 2) as a starting point, much like a chip tune does, though samples are also supported. Instruments are defined using sets of these waveforms that are blended in a variety of real-time controllable ways. On top of that there are software effects such as phasing, low pass resonant filters and so forth. It even has an OctaMED-style 8 channel mode, but you need a bit more horsepower than a stock A1200 can provide to get the best out of it.