None of this is meant to be permanent--hence "modular." The main idea is treating the laptop as a hardware effects processor. It's the same idea as the Muse Receptor, having a separate computer act as a "plug in host" to spread the CPU hit around. It's also about integrating analog and digital, live and pre-recorded. The analog sounds have richer harmonics and presence (to my ear anyway) but serve mainly as clay for the digital effects (delays and filters), which add the time element. It took me while to get rid of various hum and latency issues but I'm liking this basic configuration. So many possible combinations.
This reminded me of the music studio diagram I posted in Jan 2005. Many assumptions have changed, several hundred songs later, but this idea of circulation between hardware and software is still appealing to me.
Update, Oct 2014: It's confusing to look back at posts around this time because of my use of the word "modular" to describe this particular set-up. It's modular in the sense of being able to configure effects chains using hardware but it's not true modular in the sense of making sounds from scratch with oscillator, VCA, envelope, filter, etc.