Two Type of sound and listener preference are there more?

Type One: Detail, clarity, soundstage, the high resolution/accuracy camp. People who fall into this camp are trying to reproduce the absolute sound and use live music as their guide.

Live music in the recording studio or live music in a venue? 

For me, there are a handful of factors that create a live music feeling....like the band is playing in my room. 

They are:

1.  Dipole radiation pattern. 

2. No crossover above around 1500 hz.

3. No enclosed (box) speakers

4. SET or SEP amp. Or pure Class A. A simple design with little or no  NFB is preferred. 

5. A room that is not totally dead. The room needs some energy that is not absorbed.  

6. A much smaller factor but still relevant is the DAC. NOS or R2R are IME closer to live music than Delta Sigma.  

I find the distinction made in the OP to be too artificial to apply to myself, or many other audiophiles that I know.

Much of what is mentioned isn’t mutually exclusive. For instance, I find most often “real” to entail “more musical.”

Whenever I listen to live voices/instruments my overriding impression is how much more seductively rich they are in virtually all the things I prize. There is so much more in terms of body, harmonic/timbral richness and ease when listening to a real voice, violin, cello, trombone or whatever. The versions through most hi fi systems sound so reduced, electronic and tonally bleached.

It’s even true of lots of amplified music. If the amplification/speaker system is of decent quality I hear far more character and richness even in a single synth or electric guitar than in a home hi fi system.


However, few affordable home systems could recreate the impact of amplified shows and our ears probably wouldn’t want those sound levels every day anyway.
So I’m not expected my a recreation of hat type of live experience.

But the way I find myself stopped in the street to listen to a live instrument being played, due to the richness of the sound, is my touchstone for the type of qualities I value in high end audio: timbral complexity, richness, ease, body, organic character. (Not to mention dynamics that communicate the zeal of a performance).

To that end I’ve always found myself preferring the type of tube amplification that increased to my ear those qualities.
Someone who was sticking to the division created by the OP would likely read my use of an older Conrad Johnson amp (Premier 12s) from the time they were thought as classically “tubey” as indicating I am simply trying to sweeten the sound instead of going for a “warts and all” experience of the sources. Hence I’d be put in the “musical not real” camp. But that’s not correct: I use such amplification because every time I compared to solid state amps the tube amp version struck my ears as sound more realistic - more rounded, organic, more ease, etc.

So I have no qualms about introducing certain types of distortion into my system but it’s in the service of making the sound closer to what I hear in real life, which is also to me “more musical.”

I suspect this whole debate, a debate that pits one camp against another camp is probably a holdover from the 80s when such limited views of audio were developed and promulgated by audio magazines and reviewers and audiophiles. What is needed, I submit, is a paradigm shift away from these rather cliche views of sound and sound preferences toward a new definition of great or ideal sound, if there can be such a thing. And what is it audiophiles are really trying to achieve. Start with the premise we’re stuck with the recordings we’ve got, there’s no going back, for better or worse, and try to figure what is still wrong with playback system that keeps holding us back. There’s nothing that can be done with overly compressed CDs and vinyl save reissuing them in restored dynamics but that appears rather unlikely. Not everyone listens to iPods. But the die is cast.

I’m most definitely in the second category.  And more so with the changes I’ve made to my system. 
As a long time professional fine art photographer, I’ve often wrestled with the issue of ‘accurate reproduction’ of reality. Finally understanding that, for me, it is a photograph I’m creating, not a record of what was in front of me at the the time. but rather an expression of my perception of that reality.  And a communication of that perception. 
i find the reproduction of music very similar. In the end it is an interpretation of the performance we hear, no matter how close to parity with a live performance we come. So why not make that interpretation as satisfying as possible, by whatever means?   Maximizing the pleasure of the listening experience is subjective, by definition.  Accuracy in some objective measure is irrelevant to me. 

There are two types of people in this world, those that divided the world into two types of people and those who don't.  As others have pointed out, it's far more complex and nuanced.

Type One: Detail, clarity, soundstage, the high resolution/accuracy camp. People who fall into this camp are trying to reproduce the absolute sound and use live music as their guide.

High resolution and accuracy should be a path to excellent tone.  We are all at the mercy of the recording, but a cello should sound like a cello.

Type Two: Musicality camp, who favors tone and listenability over the high resolution camp. Dynamics, spl capabilty, soundstaging are less important. The ability for a system to sound real is less important than the overall sound reproduced "sounds good."

Musicality and high resolution are not mutually exclusive.  I believe most experienced audiophile seek the high resolution coupled with long-term listenability.  In blunt terms, many audiophile oriented systems have too much treble when compared to live, unamplified music.

Finally, there's a common sense consideration.  Does it really make sense to spend tens of thousands of dollars putting together a system that only sounds "good" on a limited number of recordings and makes most of the music you like sound crummy?   Again, we are at the mercy of the recording.