From what I have seen KIAA states that downloads are illegal but were themselves going to introduce legal downloads, one statement stated "in 2009". I have seen nothing from SC yet, but Charbuster has had downloads in beta for a while now and recently added MP3+G (CDG) format. They are charging $5 per track (which seem to me as more expensive than their custom discs). This feels like another case of "we are legal; our competition is not). Most UK brands have been downloading for at least a year.
http://www.chartbusterkaraoke.com/downloads.aspx