Does religion allow music?

I think the very question of whether religion 'allows' music needs to be understood. I find that exploring the questions we have normally leads to a profound understanding of the essence of the question itself. This is because as religion is generally concerned with guiding us towards building a living relationship with God, music is generally and seemingly a worldly past-time.
The question if whether music has any positive or negative effects in pursut of the purpose of our life must also be explored. For what are music and religion besides two words? For me this is a journey of understanding through definition.

Now to define music is interesting. Hinduism says that the SOUND that created everything was 'Om'. There are beats in nature we can not deny that exist from the mating calls of some animals, to the communication melodies of whales in the oceans and even to the very beating of our own hearts there seems to be a kind of melodious and 'musical' root. I do find it fascinating however that Allah has created Man to recognise beauty in the sounds we hear and I am in no doubt that this is also a natural miracle of Allah that in the complexity of the universe He has created humans with the ability to create the most complex  and beautiful beats through music. Think of a radio player in deep space playing tchaikovsky- the very thought of it send one into praise of Allah and His power to create!

The question of what is the state of our soul after listening to music is a good one.
I give my personal experience...
I spent one year at Kingston College studying post GCSE. I used to spend a total of one hour on the bus going there and one hour coming back totalling just over two hours travel time every day. During that time I used to listen to hip-hop and artists such as Tupac for the entire journey. One morning I was talking with my friends outside college and used foul language. Immediately I noticed and felt that I had done so, and felt extremly uneasy. During the course of the day I realised that it was because of the company I was keeping (2 hours of Tupac) on the bus, which had subconsiously had an adverse effect on my speech and thoughts.
For me, that was that was the line crossed and crucially, understood. At that time I was (and still am!) studying the books of the Promised Messiah (as) namely "The philosophy of the teachings of Islam" in which he states the reason for the prohibition of swine in Islam is because of it's effect on our various faculties. The same thing, in my opinion, is with music because it is a type of mental sustinence which some religions have taken to substitute the spiritual reality of worship.
Bruce Lee said "The mind is like a fertile garden in which anything that is planted, flowers or weeds, will grow."
This is a brilliant quote which further highlights the condition of our souls when dealing with external influences including, but not limited to, music. The mind as a fertile garden connotes that if we listen to music of a pure nature, we will benefit from it's pure qualities which when seen in light of human nature can be described as healing. Also, in light of my own experience of being influenced by music, connotes that sooner of later, the subjet matter, underlying message or background energy will come to frutition and manifest itself in various forms.
In my experience, music does effect us on a subliminal and hence spiritual level. The state of ones soul is, hence, influenced by the music we listen to. The state of our soul after we listen to music is not apparrant immediately, but over time it is as clear as the day light.

Now when it comes to giving a kind of 'ruling' on whether this influence of music is 'right', I look at it from the bigger picture of our existence as a human race as well as a personal one.
It really does depends on which kind of music one listens to. There is such a vast array of music generes that it is simply narrow minded to refer to music as one specific type. This means we must look at it a as concept. Look, nature has also varying sounds dependent entirely on purpose. The warning sound of some animals, for example, to ward off predators is starkly different to the sounds of those used when calling offspring. All however are used in different places at different times to fulfil the objective of their life at that given time.
One can understand this in light of sound because at different times of the day those who listen to music gravitate towards different types of music. At times of rest in the morning and evening we (at least I do) find, at times, it relaxing to listen to classical music. While when working out or racing we (athletes) would die of boredom if it wasn't for energetic music. However... here are days where I do not listen to music at all- it all depends!

There is also the phenomenological approach which is that if In Islam music was to be officially and openly banned across the board, then how will Islam remain a religion that is universal? Will this mean that whenever we are shopping and go into a department store where there is music playing, we will have to run outside because its haraam!? What a ridiculous notion and religion if that were the case!
Islam seeks to bring harmony between all religions and cultures. This is why we see no clear cut ruling in the Qur'an about music!
Also, as I remember Khalifatul Masih 4th (ra) once explain in a majlis-e-'Irfan sitting that in Islam there are prohibitions and injunctions. There is also a "grey area" in which our own level of righteousness can be nurtured to develop to higher states of gnosis.

Following on from this salient point raised by huzur (ra), I agree that music lies within this "grey area" of Islam where we can, through our choices, use music as a meduim to fulfil the purpose of our life. We don't have to, but it is a choice.
Yes, the purpose of life CAN be achieved without music, after all, didn't people survive when music wasn't as we know it today? Just as all humans have varying levels of understanding at different points in their lives, music may help to enhance the purpose of life at one given time. When I was younger I had a bout of depression and I would listen to songs that would 'help me through' the tough times, at times weeping because of the message in the songs related to my own circumstances. This is something not to do with my spirituality, but mentality- and there was and is nothing wrong with that.
It is also worth noting that no prophet preached the listening of music which proves that it is a paradigm which comes forth through the cultural development of a society. It is something that we see very apparant in today's society, especially in the West where we are living through the largest population boom in history. We also need to understand this through the current age of mankind and in doing so can appreciate the views and opinions of our fellow seekers!

To close, I would like to point out a subtle point to do with sound and the melody of our own human voice. As a student of Arabic, I find it amazing that the sounds of the Arabic language are so fine-tuned. For example, there are four `Z` sounds, there are two `Q`sounds as well as two `T`sounds. Also, the meaning of words can make a world of difference. For example, `Laa`in Arabic means `no`, whereas `la`means an emphatic `yes`! And the difference lies only in the length of the sound we utter. The fine-tuning of the sound we utter in Arabic matters when we want to convey meaning through communication.
When one reads Arabic tajweed keeping in mind all of the rules, yet placing no effort on the melody, it still sounds like a melodious song, which has profound impacts on ones soul. Look at the conversion of Hadhrat 'Umar (ra) when he heard Ta Ha being recited it changed his heart entirely. There was a man who was bent on the death of Rasulullah (saw) yet his reading of the Arabic script no doubt had a deep impact on his entire life!
All of this combined with the notion that the language of Heaven itself is Arabic, in my humble opinion, leaves no room for the concept of music to be seen as something "unislamic" and something to be frowned upon, but on the contrary leaves no doubt that it is something that can enhance certain peoples faith and help them reach their ultimate goal in life.