I have a computer setup and pretty much work exclusively with soft synths. Most of the time, I start out a piece with melody or chords or mood in mind, and then just load up a bunch of sounds that seem to fit. Then I start going through the piece from the top, building up the layers section by section. My music tends to be fairly structured, rather than long-form improv. type stuff, so this works for me. Frankly, I've never tried laying down a whole track live with hardware sequencers running, multi-timbral keyboard playing, realtime effects, etc. It sounds really difficult to me to work that way! I truly have no idea how the old masters did any of their stuff.