The big draw of Lips isn't its tracklist, of which only three songs have been confirmed--Duffy's "Mercy," "Bust a Move" by Young MC, and "Young Folks" by Peter, Bjorn and John.

And while the motion-sensitive wireless microphones certainly have the potential to add an entirely new element to the karaoke genre, Yano wasn't talking specifics.

No, what sets Lips apart from everything else--from Sony's SingStar to Harmonix's Rock Band--is the fact that you can stream songs off your iPod or Zune. The game then applies a vocal reduction filter to those tracks, the very same one used for actual game songs.

As with everything else regarding Lips, the specifics here were rather vague. Connecting a Zune to the Xbox 360, Yano demonstrated how the songs contained on the device will automatically appear in the Lips library.

But he wasn't able to actually show it off, nor was he able to explain how, or even if, the game will display lyrics for the streaming tracks. However, he promised that a solution would be announced soon, one that will make everyone happy.

As for song compatibility, the general rule of thumb is that any song that can be played in the Xbox 360 dashboard will work in Lips. That means most MP3s are fine, along with unprotected AAC tracks, but not any DRM-locked songs.

It should be noted that, at this point, the Xbox 360 dashboard is unable to stream songs from and iPhone or iPod Touch. However, Microsoft noted that it was "working on it."

What was shown of the wireless motion-sensitive microphones was limited, but promising. A second player can hop in a track at any time by just shaking the microphone, and shaking the mic in-game can produce tambourine noises. A points multiplier is available, performance depending, by tilting the microphone up.

You can even opt to play a short version of a song, and then shake the mic at the end if you want to keep playing the entire tack. And while the game only supports two vocalists, two other players can join in with the standard Xbox 360 controlling, using the buttons to add claps and tambourine shakes to the mix.

But that was all Yano would reveal. When asked if the game would use the motion-sensitive mics for sweeping gestures and other dance-esque moves, he was mum, but noted that the title will deliver on its potential.

Microsoft was likewise unsure as to if the wireless microphones will be compatible with Rock Band. When asked later, Rock Band developer Harmonix was clueless as well.

Though my experience with Lips was extremely limited, the cult-classic favorites iNis has produced in the past give me hope that the title will indeed deliver.

Mark me down as cautiously optimistic, but if Lips actually capitalizes on all of its potential and all the song-importing functionality, it will be distinct enough to justify its presence in the already-crowded peripheral-driven music

Lips is due to arrive on Xbox 360 this holiday season, bundled with two wireless motion-sensitive microphones. A price point has yet to be determined, though Microsoft noted that it will be priced "competitively."