The one stumbling block my kids and I had with the wired microphone was we didn't hear anything... until we realized we had to plug headphones or an external speaker into the included adapter. I guess we should have read the directions!
In addition to the dozen or so songs built-in, you can sing along to your own iTunes songs, or purchase additional songs within the app. Register at www.Soulo.com and you will be rewarded with free song downloads as well. Soulo songs are recorded specifically for Soulo, so they don't have the original artists, but the performers do an admirable job.
Soulo is offered at Target, BJ's, Apple Stores, as well as online and is a great companion for your iPad if you have any interest in singing. Like one of those Playstation or Xbox games, when you sing on-key, you get instant visual feedback with 'sparks' but you don't really need a great voice. The power of the iPad or iPhone can be harnessed to alter your pitch, just like the I Am T-Pain app and autotuning solutions! Plus, when run on the iPad, you can add echo, tone and reverb effects.
You can also leverage the iPad 2's camera and record yourself for one click posting on YouTube, Facebook and twitter. That recording functionality is disabled for your own iTunes music, because of licensing concerns. Hopefully your videos will be less cheesy than that Mister Microphone commercial!