* What is the typical music budget for a film/TV show? Other media?
Typically 2 to 5% of the total budget. So a million dollar indie film might have 20-50K for composer, songs, music mixing and so forth. A music supervisor will try to have their fee (about 10-20 percent of the music budget) a separate line item.
* What is the process of choosing music in pre-production?
The director will have a general idea of what they are looking for, there may even be musical suggestions written into the script.
* When the script calls for on-camera use in a scene (actor sings song or song performed by band in scene), how is that music cleared and then recorded?
That music has to be cleared in advance. They need to tell the master and song owners that it is Visual Vocal (or source vocal like a juke box) or instrumental which gets them more upfront money, and more backend money.