1. the combination of those two guitars: Fender Strat and Nick's Epiphone with the added P-90 pickup-- Fender Hot Rod Deville amps and both players equipped with Jekyll & Hyde Overdrive/Distortion pedals. That is what you are hearing. Both amps recorded with a single 421 Senheisser mic thru an API preamp. The rest of the magic is down to the actual interplay that was written into their parts, and the fact that they had the power and precision to play what they wanted with such finesse and control. I wasn't privvy to the actual amp setting they used so I dont know how they set the tone knobs or channel selectors. I also wasnt looking where their tone knobs and volume pots were set on the actual guitars.
2. Im glad you thought it was a synthesizer on 12:51-- that was precisely my intention, as I am a synth player first and foremost. I heard that melody, once he (Nick) recorded it, and it inspired me to think of my Arp Odyssey synth, and how I just slightly detune my two oscillators to get my best tones. So I asked Nick to indulge me in a request, and asked him to ever so slightly tune each string of his guitar down by a tiny fraction. Then I asked him to double the sound, and yes-- everyone in the room liked the result. Creating an Arp Odyssey lead/melody sound with an electric guitar. Cool, huh?