There are some interesting online karaoke sites live right now: kSolo and SingShot in particular. Recently a more general-purpose online talent site went live: Bix. It's a somewhat different beast, a talent-finding service that downplays the social network and instead has a laser focus on contests.
Unlike at the other sites, you're not barraged with a million different song links when you enter it. Instead, you're directed to view entries in various contests, vote on them, and enter them yourself if you want.
What I like about Bix are two things: First, that the contests aren't all karaoke based. There are dance, photography, and even writing contests. And second, users can easily create their own contests. American Idol-like talent show producers could obviously use a tool like this (American Idol is more likely to use kSolo). But this tool might also be used for job recruiting. For example, see the GigaOm blog writing contest.
If you just want to goof around and record some karaoke for your pals, stick with kSolo or SingShot. But if you're all about the competition, check out Bix.