I know a fair amount of music theory and there are some approaches I take in particular to writing music. It's best to go into this post with a rudimentary understanding of music theory.
First off, I think in big terms when first approaching a composition. Does the song have an ambient feel? Kind of sad? Does it have a driving rhythm?
Rhythm is the most important part of music. Most of the time I will lay out the drum track first since it gives the song life. Whether the drums are fast, slow, have a bounce... whether the drum hits are soft or hard, are all vital to the feel of a song. The music sequencer in the game fits well to even rhythms. Every 4 spaces on the piano roll is a beat, so if you're not sure what to do it's a safe bet to just start with a bass drum on each beat. Then shape the rhythm from there. Maybe you want to stress the backbeat? That's very common and I love doing that. I always think of songs in 4/4 time in the music sequencer, that means the beats count 1 - 2 - 3 - 4. So you could stress the backbeat by putting a snare on every 2 and 4.
The next most important part after drums is the accompaniment or the rhythm section. These would be the backing arpeggios, chords, and/or sounds that go behind the melody. Often in my "space" songs I will just use simple triad based arpeggios as backing. One of the trickiest things in writing chord progressions is leading the voices properly. Chord triads form the same chord as long as the notes are the same - it doesn't matter what order they are in. For chord progressions to sound most melodic, you want each note to move the least amount it has to and keep as many common tones as you can the same.
For example, say we want to go from C Major to A minor. If we already have a C Major down, C - E - G (In any order), then we need to turn that into an A minor (A - C - E in any order). C and E are common to both, so all we need to do is raise our G to become an A. It is possible to copy and paste the notes and move them downwards until we land on the A to create A minor, but I guarantee short movement gives the best results.
After I have my feel to the song in place, I lay down the melody. My melodies are often improvised on guitar while the accompaniment plays. The mood I'm going for has the biggest impact on how the melody goes. If I'm going for something space related, it's a pretty safe bet to stick to wide intervals for that "floaty" feel. I use a lot of min9 and min11 arpeggios. For example, the glockenspiel in the backing of "Lonely Galaxy" is just constantly jamming around a Bmin11 arpeggio.
One of the beauties of synthesized music is we can write things that are physically impossible to play otherwise. I have many runs cross over octaves quickly to give a reverb like ambience.
Beyond pure songwriting, the music sequencer has plenty of nuances to get used to. First off, the audio effects are VERY powerful. Playing with reverb and delay can really help give a full sound, but don't overuse it! Super saturated delay is no substitute for natural sounds and will only make the sound muddy!
There is also timbre. Timbre is the natural sound of an instrument, aside from dynamics from the player. Each instrument can vary the timbre quite a lot so use the right stick left/right to experiment with sounds. Sometimes I'll mix some timbres within a chord to give a very full dynamic range.
One of the coolest features is the ability to bend pitch. If you drag the end of a note up or down you'll actually be blending one note into another. You can also hit R1/L1 on this bend note to scale it more. This way you can bend to a note and sustain, or even bend - sustain - and bend again!.
The note ends can be independently scaled with the right stick for different volumes or timbres - this means you can gradually fade in and out, or even distort the timbre of a sustained note! There are quite a bunch of possibilities that I am only starting to touch on - I will make much more music in the future, I guarantee!
Stay tuned for the next installment - User Interfaces!