We know about physiological and behavioral effects of music therapy from research published in nursing journals and music therapy journals. I have listed some effects on infants in a NICU. Furthermore, we know of research pertaining to cognition, speech & language, and sensorimotor domains thanks to Dr. Michael Thaut and the Center for Biomedical Research in Music at Colorado State.
Another great contributor to music and brain studies is Ani Patel, PhD and his book Music, Language, and the Brain. He is Senior Fellow in Theoretical Neurobiology at the Neurosciences Institute in San Diego, CA. He received an ASCAP Deem Taylor Award for his book alongside Oliver Sacks, MD in 2008. He recently made an appearance on UCSD TV with Barbara Reuer, PhD. You can hear a podcast with Dr. Patel at the Library of Congress. His work is also mentioned by other neuroscientists and even bird lovers! In the following video, he provides an in depth lecture, describing how the brain processes music and language.