Steve has one of the best tones I think I ever heard. This is partially due to the fact that he uses his fingers to play, which is interesting.
Heres a video of probably his most famous guitar solo from the song Firth of Fifth, written while he was in Genesis (the video isn't a Genesis performance, it's a more recent Steve Hackett solo show, with a few other famous Progressive musicians)
http://youtube.com/watch?v=xW_7YyKawbw