I've always thought that Tony used a fretless or "The Stick" on this track and he may well have done so in the studio. The other day I was watching VH1 Classic Videos and a Peter Gabriel live video came on of In Your Eyes. I noticed that Tony was using his 4 string Music Man Stingray, with frets (his main one that he used at the time. I've read this is the bass he was always re-painting for what ever tour he was on at the time). The tone he was getting was exactly like the recorded version (which leads me to believe that he used this setup for the recording possibly). What kind of effect do you think he was using (make, model?). To my ears it sounds like some sort of envelope filter effect that is set to mimic the sound of a fretless.