When I first became interested in making chip music, I started with modplug tracker.
I love modplug. It is still the easiest tracker for me to get my ideas down in. If writing an NES song, I would MUCH rather use Modplug than Famitracker, Nerdtracker, NTRQ or Pulsar. My NES samples are perfect (most of them are stolen from Virt and Norrin Radd for fucks sake, how more authentic can it get when sample based) and I know the program so well that it's really easy for me to throw down ideas in it. I've also used a ton of other samples and styles in Modplug with similar success; I especially like writing c64 style stuff with it.
Why don't I use it live? Well, in the first place, I don't have a laptop. If I did, I might. In all reality, when I'm playing LSDJ "live", there is very little I'm actually doing with the Game Boy. Sometimes I get a cool idea and go into live mode and change stuff up. Normally I'll edit parameters of instruments and tables, fuck with the sync command like Nullsleep was doing for a while (such a cool trick that can psych people out)...but mainly my performance comes from manipulating the songs on my Mini-KP, which I could just as easily do with modplug. Hell, my last show I actually played a song from my iPod because someone kept requesting it so much, and realized while playing with the mini-KP I was basically doing the same thing as I would with a game boy.
But my other reasoning for favoring the Game Boy, is that I like the sound it produces. It's just that simple. And there is the added benefit when playing live, that I'm playing using a couple of GBCs, instead of just hooking a laptop up like any other electronic artist. I want people to know I'm doing something different. You can hear it in the sound, but I want them to see that this isn't just me running some program on a computer and making "video game sounding music", I'm using actual Nintendo hardware to create some dirty and hard as fuck dance music.