Well, audio rate modulations are typically also quite gritty on the real stuff. A bit of moderate aliasing doesn't really matter IMHO.

i don't think so. you can always just use oversampling which is straightforward to implement. (well, almost always - there are some limitations, too - for example, filters tend to become more prone to numerical precision issues when heavily oversampled). i consider oversampling as a brute-force method which (almost) always works, but should be used only, when nothing better is applicable - which, as far as i know, is the case for FM.

I guess gritty is okay, but too much aliasing turns into a slew of fuzz or white noise - seems to be the case for many VA's with extreme audio rate modulation.

I see - computationally expensive rather than messy.

Oxium is indeed a great synthesizer but you'll easily encounter ailasing with even a bit of filter FM. In my experience there are many popular softsynths that handle this way better, and of course, Diva is still the undisputed queen of filter FM in my books.

One problem is that it can be hard to distinguish between desirable modulation and undesirable aliasing when using drastic modulations.

Careful now - according to Xils' own sound designer Oxium doesn't do FM (what routing Osc1 to VCF Freq or Osc2 Freq in the mod matrix does is anybody's guess).

Sure, and often enough aliasing is desirable- extra noise for free.

But on an analog modular for example you can do heavy audio-rate modulations which can then be darkened so the highs don't rip your head off, offering complex and noisy, but not aliased-noisy spectra. It's something I dig, because it is a simple way to get sounds which sound to me like they are made out of wood or other materials, so to speak.

For example, this is a single heavily modulated tone, with no filtering other than a fixed non-resonant LP to tame the highs (the descending pitch effect is from altering the pitch of the modulator):

http://soundcloud.com/aroused-by-jarjar/fm-example-abjj

One thing I don't like about aliasing is if your track is filled with it, you will have a hard time getting your tracks overall volume up to commercial levels.

early on i couldnt figure out why my tracks would start to sound like sh1t when i started to apply master limiting, it's because the aliasing that was already present in the track was getting raised with everything else, and the inharmonics have the effect of clouding the sound, which makes the individual sounds seem less distinct, the whole thing becomes a shitty murky mess to get right down too it. so nowadays all my distortion and synth plugins are heavily oversampled.

...in addition, there's the whole sweet/pretty FM thing that can cause aliasing not by brutal indexes but by high-freqency M:C ratios, and other subtle but rapid (i.e. high-pitched and prone to aliasing) modulations. This kind of thing will work with aliasing because it is low level, but without aliasing it is a whole other realm of sound because it doesn't get a "thinness" or an "'80s" or a "far back" effect.

http://soundcloud.com/aroused-by-jarjar/fluttering-fm-abjj