Ok when I go to bed, before I fall completely asleep I have audio hallucinations. Usually, it is music. The best can describe the type of music is Ornette Coleman’s free jazz. The music can appear to be incredibly loud. If I realize I have to go to bathroom the music will stop and I am surprised how quiet it is. While it is mostly music, I do also sometimes hear voices. Not really sure what they say. It could just be movies I am remembering or people I know talking. I only hear the music/voices when I am almost asleep; I don’t ever hear it during the day or even if I go to bed am not almost asleep.
My question: is this some sort of psychosis? Am I schizophrenic? Or is this fairly normal?
This is extremely common. Most people have the experience of being rather stoned every night.
What you’re describing is known as the hypnopompic (hypnos = sleep, approx. pomp = approx. bringing) experience. It is an altered state of consciousness that you find between being awake and being asleep. It is marked by obvious things like poor judgment, difficulty speaking clearly, randomness of thought, and so on. Visual hallucinations are not unknown, and auditory hallucinations are extremely common.
As is being discussed on another thread, falling asleep is not where memory is imprinted at its best. Heck, for all we know we could be under the impression of being abducted by aliens, with giant syringes full of sleep-potion every night, and not even remember it. 
I’ve got quite vivid recollections of one hypnopompic trip I had while at the wheel… usually, what I do remember is an experience of hearing music (pretty much any kind) and thinking nothing of it. When I was a kid, I would frequently have visuals and hear voices as well. The visuals are now extremely rare for me. Voices? Only once or twice a year, but when I do hear 'em it scares me enough that I’m instantly wide awake.
I think it’s normal; or I’m a nutjob like you. 
I get them very rarely, but they are VERY cool. Never hear voices. I got them mostly during college after being over-tired and stressed-out after staying up all night writing a term paper. I think nicotine and caffeine may fit somewhere in the equation. For me, the experience is hearing completely original music, fully orchestrated as if the radio were on or something. I’m pretty much awake when this is happening, and I can control the music. One reason I wish I had more of these is because they help me in composing music. The few times I had this auditory hallucinations, I would try to think of a song I was working on, play the first few bars in my head and WHAM, the rest of the song comes out. It is really awesome. Unfortunately, I have to jar myself out of the state to transcribe what I subconsciously composed. And then I can’t get back into the state.
I found that, unlike dreams, when I’m fully awake the music sounds just as good as when I was in the state. I’ve often dreamt poems and other musical phrases in my sleep, but those invariably end up being complete garbage when I wake up. These auditory experiences are very, very different. They’re finely structured and conform to Western music harmonic tradition. I’ve never been able to replicate by using any sort of substances, incidentally. Just being way over-tired.