I make recordings of my wife playing various instruments in our house, using a digital recorder and various microphones, in 24/96 format. (The 96KHz sampling rate is irrelevant, but I like the 24bit word length for overload protection.) Different drums kits, a vibraphone, and a piano. I have recorded a couple of her bands practicing in the house, and I also have a studio-made recording of my step-daughter playing the flute.
On my tuned Revel/Velodyne system I can tell you that there's no doubt in my mind that a modern high-end audio system can get very close to the sound of live individual instruments or small ensembles. Very close. One primary difference is that you are hearing the acoustics of the room twice in a recording. Once when you record it, and again when you reproduce it at realistic volumes. I think this always makes the recordings sound a little less live.
While a great system can reproduce audible cues of a large group plating in a large space, like an orchestra in a concert hall, here the illusion falls apart, IMO. I've never heard any system, including mine, sound live with an orchestra recording. It can sound very, very good, even truly exciting, but it would never be mistaken for live.
In the case of the before-mentioned flute recording, my step-daughter once stood between my speakers and played along with herself. If you sat in the sweet spot and closed your eyes there were times I wondered which was which. In the end I could always tell, but sometimes I had to listen for twenty seconds or more. That's pretty good, IMO.
My wife's rock drum kit is a big challenge, especially for dynamics, but the audio system get close. Not quite live, but close.
With the piano and the vibraphone I think I can fool people.
