As an amateur musician and a fan of both stage and film musicals, music plays an important part in my creative process. As such, I often find myself tempted to use the music that inspires me in my work. My question is, how would you handle this? Simply intersperse the lyrics between paragraphs? Have the characters sing the songs? In the latter case, would you mention the background music? Give it a source? Would the song simply be performed, or might you try to create a psychedelic picture to go with it?
On a related note, would you use songs by just one artist/band? Do it Moulin Rouge-style and take songs from many different sources? Or try your hand at writing your own songs?