Everyone uses different tools. Lots of people build their own. Overtone, the tool in this post, is a clojure frontend to SuperCollider (http://supercollider.sourceforge.net/). Overtone is used to describe synthesiser networks which are then executed by SuperCollider.
They use tidal (https://hackage.haskell.org/package/tidal), and it is indeed written in Haskell.
As the person typing in that video, I can confirm that it is tidal. Actually I am not aware of anyone else getting as far as using tidal in performance yet, hopefully soon.
Meta ex have played at a couple of algoraves using overtone.
At the algorave in Sheffield there was
* Yaxu - tidal
* Curious machine - game of life cellular automata and a visualiser on the SNES
* Sick Lincoln - SuperCollider mostly pre composed
* Shelly and some Mandelbrots - SuperCollider as well, live coded
* Section 9 - ixi lang
* Luuma - loads of crazy stuff built in c++, I think running on FPGAs
Check http://algorave.com and http://toplap.org for info, videos and links
For a talk that actually uses Overtone, I'd suggest this one: http://www.infoq.com/presentations/music-functional-language
This looks very similar however It doesn't mentioned haskell anywhere, despite the syntax looks like haskell/a similar functional language.