Well, I can't speak for other colleges but your sig. says you're interested in Oriel so ... I'm not a musician myself but I know that there is a music practise room in third quad with a huge grand piano that people can use. You can hear the music out in the quad and it really is beautiful; I love it. You walk in off the street after a boring day at the Bodleian, feeling a bit miserable, and this music just sort of wafts towards you in the dark. As for guitars, I'm not really sure ... I know loads of people who play the ukelele, if that helps? And the college runs a recital series over in St. Mary's Church on the High Street where people can do solo performances etc. The college website claims students can play the piano in the chapel, although I've never heard of anyone doing that, probably because I don't venture into the chapel that often ... If you're really keen you could audition for one of the awards (which are reserved for people not studying Music, I think) which gives you free music lessons or something. My Physics friend got one for the piano/keyboard last term. He brought his keyboard up with him, though, as most of the rooms on the island site are fairly roomy.
Most colleges will probably have fairly decent music facilties, though. Merton and Magdalen have pretty good reputations as far as I'm aware.