In order to take things to the next level, the Xbox crew has added a couple distinguishing features. First: the Lips microphones will be "interactive" with "lights on the shaft of the microphone that pulse to the rhythm of your voice, and motion sensors that allow you to dance, move or swing to score points." Second: you can use songs from a CD (how do you get them into the game?) or from an iPod – apparently the game will magically "reduce the vocals so you can sing along and be heard." Don't know the lyrics by heart? You can add those in as well.
As Microsoft continues to focus on the mainstream consumer, a karaoke game is a natural fit. Expect to hear more about Lips (like maybe a real title!) at E3 next month.