Hi. I've been studying this the last couple of days, and thinking of getting into it. There is a recently launched website http://creators.rockband.com , that allows you to take a song from your band and turn it into a Rock Band track. There is going to be a marketplace for the songs on XBox Live.
I'm not a musician, but I am a (part time) recording engineer, and so have lots of multi-tracks. I've been thinking about trying this out, partly as a fun experiment, and partly as something I might do in the future as a hobby / side job.
Here's the process in a nutshell:
1. Record the song as a multi-track in a Digital Audio Workstation.
2. Convert it to stems (i.e. Vocal Track, Drum Track, Guitar Track and Bass Track)
3. Import the stems into Reaper, and convert them to MIDI
4. Modify the midi tracks so they have notes for the Rock Band instruments
5. Test them in Rock Band and tweak them. Profit.
Has anyone else looked at this? Planning on making some tracks?

Some of our members have bands (Vagabond comes to mind...Weclock had one ...) and they might appreciate this info. It sounds awesome as hell too!

vag is in a band?
are they called the crusaders?

No, The CD Lickers.

the remorseless? the merciless?

I've messed around with the creation system Frets on Fire uses in years past. It's more simple, as you only have two tracks running.
But I'm not a musician by any stretch. :(

Isn't there something similar in the newer guitar hero games? I seem to recall reading something about a user song marketplace