I'm no expert guitar player, but I've played guitar. The Guitar Hero controller is slightly better than "air-guitar" at simulating the real thing but almost nothing like a real one.

Guitars (even electric ones) are not digital. Using strings to create music is very different then hitting the right button. By adding more buttons to the controller, you would be recreating the Keytar (yes, I'm a child of the 80's, I know the word Keytar ).

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Also, I wonder if I am the only person on the planet who thinks they should add a freeplay mode on Guitar Hero.

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No, the original developers (Harmonix) wanted to add a freeplay mode. They just couldn't find any results they were 100% happy with.

As far as creating your own songs, check out "Frets on Fire".