Classical musicians and composers have always kept a close eye on new recording technologies, Glenn Gould being the most well-known example of this. With him, the line between musician and technician blurred so much that, later in his life, he talked more about his recording techniques than his actual performance.
It wasn't until the end of World War II that the line between recording media and the music itself blurred. Magnetic tape was invented in Germany during the war and experimentation with the new material picked up in the late 40's.
Invention of this technique is generally credited to Pierre Schaeffer. Schaeffer wasn't a musician in any sense - he was a technician and a scientist investigating mathematical ways of describing the behavior of sound waves. He spent most of his time analyzing the sonic profiles of percussion instruments.
Classical composers, previously limited to sounds produceable in the real world, were given the ability to alter the structure of the sounds themselves instead of altering the way they were produced. This gave them far more control over how, exactly, their compositions would sound when completed as well as taking themselves outside of the constraints of traditional instrumentation.
By changing the shape of the tape being spliced and by altering the play speed, the inherent sonic characteristics (pitch, etc.) of the sound waves could be altered. Think of it as an ultra-analog precursor to the synthesizers used in the sixties and seventies.
This technique also made looping possible, with tape adhered to itself running endlessly around the play heads. This eventually made its way down to popular music, used by The Beatles (Revolution #9) and Pink Floyd (Dark Side of the Moon).
The downside of this is that pieces constructed in this medium couldn't be performed in the traditional sense and are generally reacted to poorly by audiences outside the classical music intelligentsia - without a performer to focus on, the music was considered too intellectual to be viable as more than an exercise; contrast this to the atonal prepared piano pieces of John Cage, a composer who used aspects of the Concrète and yet are still inherently performance pieces. To that end, many pieces are written as ensemble works for tape and live musicians. This eliminates some of the characteristics of pure tape and adds a more audience-friendly atmosphere.
Pure Musique Concrète is generally atonal, percussive and ambient in characteristic. Traditional musical form is sometimes obeyed, sometimes not. Much like 12 tone music, the focus is on the method as much as it is on the finished product. Try to keep that in mind if you sit down to listen to a selection - there is very little music out there that challenges accepted musical ideas the way Musique Concrète does, even sixty years after its inception.
Sources:
Music classes. lots of 'em.
Also, some help from:
Jeff Snyder. Pierre Schaeffer. Lebannon Valley College.
http://csunix1.lvc.edu/~snyder/em/schaef.html
January 20, 2005