I feel always the best is, when you have your own musical ideas with your own instrument programmed in a MIDI file or even a guitar pro file together with ideas that you might want to see (open for different of course) for the other instruments.
I've seen many people do the track-by-track recording as such. They create a single running example file floating around and everybody prepares for that accordingly. Then, during the recording/mixing phase (if you have) the producer changes things here and there hoping that the musicians can keep up. (the song can start as reggae and might end up like a rock song depending on the context) So you start by recording the drums and the bass and the song is updated whenever you have finished tracks (or at least almost as the final product). Iterations are still possible.
The idea of a MIDI file is that you can mute certain channels and work on it while you still have the remaining skeleton. Pro Tools/Reason/Cubase etc. all are nice but sometimes difficult to have it on everybody's computer, hence something like a midi which is (should be at least) universal in all computer frameworks (as far as I know of).