Agree with the others about integrating it in to a theater-type system. We have done it, but it never sounds that good. And from what I understand AVRs aren't designed to handle microphone level. Have to do more research on this, as I have a client now who is dying for an upgrade (her system goes through a standard Denon AVR), but really wants to keep the in-ceiling speaker vibe.

As to your question, I have played around a bit with "Karaoke Anywhere" on iOS and it seems pretty cool. Haven't done too much thinking about integrating it, but I imagine that one of these: [Link: store.apple.com] plus a long enough HDMI cable that you plug in to when you want to rock out would fit the bill well.