Arkhan, I would say it would depend completely on the game, really. I mean, if you're going to do chip tunes you'd have to strip everything down to 5 or 6 channels and pick instruments pretty carefully as it is, so I don't think you can go totally sheet music no matter what you do. If you do CD soundtrack, well, that makes it easier to either stay with what's there or branch off.
That doesn't answer the question though.
I'd feel a bit cheated if some epic fantasy RPG just belted out Bach/Mozart/Chopin without much reworking.
Splatterhouse and Parodius borrow from classical works but do so in a way that makes you sort of forget that they did.
I am also unsure how you determined that there is a lack of classical music in games. I'm also unsure what type of game you are talking about. If you're talking about say, sci-fi shooters, I don't see why you'd really want classical music. Elegant, flowy orchestral pieces don't jive well with robots and aliens blowing the f*ck out of each other.
The 90s CRPG era had classical music spewed all over it....
You could basically insert the rest of the Wizardry, Ultima and M&M games music in here
and then here's your standard obnoxious, diddled up classical music, with electronic nonsense thrown in.
take out the electronic beats and you have a fairly standard orchestra performance.
and then, I mean
I could probably do this for awhile.