I just discovered this "trick" myself a few weeks ago and have since converted a bunch of bass tracks to midi. 
The Bass tracks were mostly recorded a few years ago and I just didn't like to tone and the string noise etc. 
 
The resulting track will need editing for sure. For me there's always the duration overlapping for some reason. So a quick fix is Highlight the track and drag the whole works duration back until they don't overlap. Downside to this is very short notes will disappear, So now I look for those short notes first and make them longer.  
 
For SI bass you also have to transpose up 12. 
But when done it's impossible to hear any difference in what I had played so it's the best of both worlds for me. 
 
I tried a real snare track and it made a mess. Now I know why because of this so called Melodyn settings. 

Another thing I typically do is "Quantize".
Sometimes the conversion works great, but like any real life performance, it is off by milliseconds.
Im actually a big fan of this humanized playing but some times you want that part tight as a knot.
Just quantize a portion of the part. results have been fantastic for me.

dwardzala
All I am doing is recording an audio track.  Then I drag that track into a midi track.  I usually have to do some editing of harmonic frequencies, but generally this is pretty quick.
 
I don't use melodyne for this part of the process (but I think the setting in melodyne is important.)

thx...

Here's a question, How do you actually open Melodyn on it's own?? The only way I know is to create the regional effect. 
I've been using drum replacer for snare parts but I would rather use melodyn now but it's hidden from me. 

It should be under the Celemony folder in your program/apps list.

dwardzala
All I am doing is recording an audio track.  Then I drag that track into a midi track.  I usually have to do some editing of harmonic frequencies, but generally this is pretty quick.
 
I don't use melodyne for this part of the process (but I think the setting in melodyne is important.)

I have been unable to replicate this behavior. I've tried Special copying & pasting, dragging audio clips with & without Melodyne inserted to no avail. I followed this Cakewalk video ... but I cannot find any printed documentation on this feature.
 

 
What am I missing. (I'm using Sonar Platinum)
 
Eric

You do not need melodyn open. I don't even have it licenced to my DAW as I never use it. So it's the ARA thing. 
It even works in my Home Studio Version. 
Just drag a Bass track to  a midi track, done deal. As said needs some editing but pretty slick. Of note is I didn't get a very good result with a guitar part , it seemed to jump around more, but bass works every time for me. 

The way I convert audio to midi is as follows:
A) you have an audio track
B) create a midi track using TTS-1
C) copy and paste the audio track to the midi TTS-1 track. You will probably get a piano sound.
D) from there you can create another midi track with the instrument of your choice and copy and paste the TTS-1 track to your new track. 
 
This works for me, I hope this could be helpful to you and it is not a complicated process.
 
Regards
 
Gerry

OK. Worked on it some more. Perhaps Melodyne doesn't have to be loaded but it certainly appears that Celemony's's ARA technology has to be present. As it turns out, Melodyne was not installed properly on my system so when I tried to simply drag an audio track to a MIDI track as you were all doing, nothing happened. Blank track. However, after re-installing Melodyne this feature is now available. Yahoo!
Eric