Lips faces a conundrum that it never really overcomes. It's mechanically sound, and it's designed exceptionally well to cater to non-gamers, the plastic guitar crowd, and karaoke fans. It's a great party game in the sense that it never penalizes the player, and it offers rewards in droves -- theoretically, you could leave it on at a house party and accumulate hundreds of achievement points by the time the last guest leaves.
The problem is that the gameplay leaves a lot to be desired. The singing engine itself is par for the course, but the motion-sensing mic as noise-maker and the implementation of Star Stream are huge annoyances that hurt the experience more than they help, especially if you're a big fan of karaoke games. Although Lips tries to transcend karaoke games by doing something different, it's ultimately hobbled by a foundation of mediocrity.